Hannover Re Posts Loss, Cites Storm Damages
NU Online News Service, Nov. 11, 4:02 p.m. EST?The German reinsurance giant Hannover Re reported today that during the third quarter the company lost 20.4 million euros ($26.3 million), caused in large part by high losses from U.S. hurricanes and typhoons in the Pacific region.[@@]
In contrast, Hannover Re had reported net profit of 94.2 million euros ($121.7 million) during the year-earlier quarter. Hannover Re also saw its earnings figures drop for the first nine months of 2004, when compared on a year-over-year basis. The company's first-nine-months profit for this year was 191.1 million euros ($246.8 million), lower than 256.6 million euros ($331.4 million) reported during the same period in 2003.
In its earnings report, Hannover Re assured that it is still seeing "unchanged favorable conditions" that are prevailing on reinsurance markets. But, the company said it took a blow from "an unparalleled major loss burden" from natural catastrophes in the amount of 358.6 million euro ($463.1 million).
Specifically, Hannover Re noted that in the third quarter alone, the loss burden from U.S. hurricanes, typhoons in the Pacific region and other major losses amounted to 222.2 million euros ($286.9 million), which is equivalent to 22.7 percent of the company net premiums.
Nonetheless, Chairman of the Executive Board Wilhelm Zeller expressed his company's satisfaction with the overall results.
"In view of the extraordinarily large burden of catastrophe losses," Mr. Zeller said in the earnings report, "we are highly satisfied with the result. The impact of the major losses was largely absorbed by the quality of our other business."
Mr. Zeller said of the Hannover Re property-casualty reinsurance business that "the market remains on a high level. In almost every segment we see good chances of writing profitable business."
Hannover Re, for the third quarter, also reported smaller gross written premiums and net premiums earned. The company reported 2.384 billion euros ($3.078 billion) of gross written premiums for the quarter, down from 2.894 billion euros ($3.737 billion) during the year-earlier quarter.
The net premiums earned for the quarter was 1.977 billion euros ($2.553 billion), lower than 2.270 billion euros ($2.931 billion) during the year-ago quarter. But Hannover Re explained that the falling gross premiums were due to the company's "More From Less" initiative to optimize its business portfolio, in an effort to replace high-volume, low-margin proportional business with profitable non-proportional business.
Looking forward to the full-year earnings report, Hannover Re said "unusually high catastrophe loss expenditure" during the third quarter is also poised to put a drag on the yearly profit figure.
The company recently cut its full-year 2004 profit forecast by 23 percent after observing damage claims from the four U.S. hurricanes and Japanese typhoons during August and September. Today the company reiterated its lowered forecast of 300 million euros ($387 million) in profit for full-year 2004. In 2003, the company had net profit of 354.8 million euros ($458.2 million).
Hannover Re, based in Hanover, Germany, is the fifth-largest reinsurance company in the world. The company's largest business segment is property-casualty reinsurance. It also offers financial, life, and health reinsurance products worldwide.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.