Hannover Re posts Q3 net income of euro159 million

FRANKFURT - German reinsurance company Hannover Re AG reported net income of euro159 million ($235 million) in the third quarter from a loss a year ago, as a result of an increase in premiums and a one-off profit related to a recent acquisition.

The company, based in Hannover, lost euro395 million in the year-ago quarter but was helped this year by a 23 percent increase in gross written premiums — a measure of revenue — to euro2.42 billion.

Reinsurers sell back-up coverage to insurance companies to spread risk in the event of catastrophe or large claims.

The company said it expects "a pleasing result" for 2009 in both its non-life and life-health reinsurance, with net premium volume to grow by around 30 percent.

"With our result for the third quarter we have secured a very good foundation and are in a position to raise our profit target for the full financial year," chief executive Ulrich Wallin said.

"We now anticipate earnings of at least euro5.75 a share and are looking to pay a dividend of at least euro2 per share," Wallin said.

Hannover Re said that provided the burden of catastrophe losses and major claims remains within the anticipated bounds at the non-life reinsurance business, "a very healthy profit contribution can be expected.

"All in all, the life and health reinsurance business group should also deliver a very good profit contribution to total business," the company said in its report.

Hannover Re said that due to an unremarkable hurricane season, catastrophe losses in the third quarter were below average.

Hail and flood damage in central Europe, a Russian industrial fire and one marine claim led to expenditures of euro35 million in the third quarter.

Total catastrophe losses and major claims stood at euro198 million in the nine months to Sept. 30, compared with euro445 million in the same period last year.

The results and outlook pleased investors, sending the shares up 3.1 percent to close at euro32.28.

In the non-life reinsurance business, gross written premiums increased nearly 17 percent in the third quarter to euro1.3 billion from euro1.1 billion in the third quarter a year ago. Net income for non-life reinsurance was euro108 million compared with a loss of euro373 million.

In the life and health reinsurance business, gross written premiums rose 33 percent to euro1.1 billion while net income in life and health reinsurance was euro49 million compared with a loss of euro3.5 million a year ago.

Over the first nine months of the year, the company said total gross written premiums rose 26 percent to euro7.7 billion. The results include euro606 million from the recent acquisition of the ING life reinsurance portfolio.

Net income in the first nine months of the year was euro578 million, compared with a loss of euro143 million last year.

Insurance and reinsurance companies are closely watched for their assessments of markets and the economy because they generally invest large sums of premium capital.

Hannover Re said its investments "developed satisfactorily" during the first nine months with its portfolio of assets rising by euro1.6 billion to euro21.7 billion.

It said that despite significantly lower interest rates, ordinary income on deposits amounted to euro604 million in the January-September period, down 4 percent from euro628 million a year ago.

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