Hannover Re has reported a massive rise in its operating profit for the third quarter, up from (€283m) in 2005, to €257.1m in 2006. A primary factor in this growth was the fact that catastrophe losses in the quarter were benign compared to those of 2005.
The group saw gross written premium for the nine months grow by 4.3% relative to the same period of the previous year to stand at €7.6bn.
GWP in property and casualty reinsurance climbed 2.2% to reach €3.7bn. For the quarter, the group incurred losses of only €12.1m, and €92.6m for the first nine months (2005: €867m). Operating profit surged to €479.8m (2005: €-32.3m), benefiting from strong rate development in the last twelve months. Chief executive Wilhelm Zeller was however keen to point out that, “We do not rely exclusively on an advantageous market climate. Risk management is a high-priority issue for our company”.
In life and health, Hannover improved its operating profit by 58.3% to €107.8m for the nine months; although it should be noted that this amount includes extraordinary income of around €20m from the commutation of a sizeable US treaty in the second quarter.
The group however recorded a decline in operating profit for it financial reinsurance operations, down some 25.4% to $48.3m (2005: €58.8m), due to the anticipated decline in interest on deposits.
"With our interim result we have put in place a strong platform for revising upwards and framing in more concrete terms our originally envisaged profit target for the full financial year – namely a return on equity of at least 15%. Against this backdrop we now anticipate a return on equity comfortably in excess of 15% and group net income of around €480m", said Zeller.
