The parent company of Hannover Re, Talanx Group, has reported a 31 percent climb in net income with all four divisions reporting increased earnings with Industrial Lines improving by a substantial amount.
The “20/20/20” programme, which aimed to lift profitability in the area of fire insurance, has been successfully completed and the Group’s return on equity was above the forecast. Talanx reaffirms its 2020 forecast of Group net income in the range of “more than EUR 900 million” to EUR 950 million.
“We grew premiums by 13 percent and profits by 31 percent in 2019, generating record net income of EUR 923 million. In other words, our ambitious Strategy 2022 initiative already bore its first fruit last year”, said Torsten Leue, Chairman of Talanx AG’s Board of Management.
“Encouragingly, all four divisions contributed to the rise in profits. Retail Germany, Retail International, and Reinsurance all continued their strong performance, while Industrial Lines recorded an impressive improvement. The latter significantly exceeded its price adjustment target of 20 percent for fire insurance and is now clearly generating an operating profit again.
“Our growth initiatives are having an effect. For example, HDI Global Specialty lifted its premium income by more than 30 percent to EUR 1.4 billion. The commercial business in the Retail Germany Division recorded growth of 8 percent.
“We also made substantial progress in modernising our IT in 2019 by retiring the BS2000 mainframe system. We are convinced that we will position Talanx for even greater growth and stronger profits in the coming years by encouraging an entrepreneurial mindset and independent action among our employees.”
Reinsurance lifts contribution to Group net income
The Reinsurance Division hit its growth and earnings targets in 2019 despite large losses exceeding expectations. Gross premiums rose by 18 percent, or 15 percent after adjustment for currency effects. Operating profit improved 12 percent to EUR 1.8 (1.6) billion despite above-average losses from natural disasters. In addition, the 14 percent rise in net investment income to EUR 1.8 (1.6) billion was very encouraging. The contribution made by the division to Group net income increased to EUR 619 (540) million.