BERLIN (AP) — German-based reinsurer Hannover Re AG says Japan's devastating earthquake and tsunami cost it €232 million ($344 million) — part of a heavy burden of losses from natural disasters that weighed down its earnings.
Hannover Re said Tuesday that major losses in the first quarter totaled €572 million — exceeding its planned full-year budget for such losses of €530 million. New Zealand's earthquake cost the company €152 million and flooding in Australia caused losses of €52 million.
Net earnings for the January-March period declined by two-thirds, dropping to €52.3 million from euro151 million a year earlier.
The company's shares traded down 2.6 percent at €39.98.
Reinsurance companies sell backup insurance to primary insurers so the industry can cover big losses.
Big disasters such as storms and earthquakes often deliver temporary hits to earnings, but in the longer term present less of a threat to their business. Disaster headlines often make more people buy insurance, and can enable reinsurers to raise their prices during annual renewals.
Hannover Re reported that non-life reinsurance premiums jumped in fact 11.8 percent from a year earlier. It said treaty, or policy, renewals as of Jan. 1 were “better than expected” and that the company still had pricing power.
“Despite softer market conditions the company was able to write profitable business and further consolidate its market position,” it said.
Hannover Re's statements echo that of German rival Munich Re AG, which has warned that it will make a first-quarter loss. Munich Re says the combined disaster losses were €2.7 billion ($3.9 billion) for the quarter, or 10 times what the company pays out in an average quarter.
Munich Re reports earnings May 9, while Swiss Re reports Thursday.
On Tuesday, Swiss Re shares were off 0.4 percent, while Munich Re rose 0.3 percent and France's Scor SE fell 0.6 percent.
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