(Bloomberg) — Hannover Re, the world's third-biggest reinsurer,said second-quarter profit rose 10%, helped by a lower level oflarge claims and higher life reinsurance earnings.

Net income climbed to 211.5 million euros ($282.7 million) from192.3 million euros a year ago, the reinsurer said in a statementtoday. Profit compared with the 223.8 million-euro average estimateof 11 analysts surveyed by Bloomberg.

Reinsurers help primary insurers such as Allianz SE and Axa SAshoulder risks for clients. They are facing pressure on theirearnings as reinsurance rates decline amid lower-than-averagedisaster claims and record capital available for their coverage.Funds available in the reinsurance market grew to a record $555billion by the end the first quarter, according to reinsurancebroker Aon Benfield.

The Hanover, Germany-based reinsurer, led by Chief ExecutiveOfficer Ulrich Wallin, confirmed its full-year profit target ofabout 850 million euros for this year. That compares with 895.5million euros reported for 2013.

Earnings at the life reinsurance unit more than doubled to 72million euros, while the non-life unit reported a decline of 20% to150 million euros. The quarter's major losses were “again slight,”lowering costs for major claims this year to 104.7 million eurosfrom 259.5 million euros a year ago, Hannover Re said.

While the first-half's lower-than-average catastrophe claimshelp reduce claims costs, they also limit pricing power for theindustry. Reinsurance rates declined in the main renewals of annualtreaties in January, April and July. They fell in seven of the last10 years, according to the Guy Carpenter World Property CatastropheRate on Line Index.

Hannover Re shares rose 1.4% this year, valuing the company at7.6 billion euros. The Bloomberg Europe 500 Insurance Index fell0.3%.

Germany's third-biggest insurer, Talanx AG, owns 50.2% ofHannover Re.

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