Hannover Re hit by oil rig claim

Hannover Re said its H1 results were hit by major losses, forcing its combined ratio to 99.5% (97.1%). H1 net premium income rose by 7.9% and it described its net income of €310.6m, though 28% down on the same period last year, as “satisfactory”.

Chief executive Ulrich Wallin said: "Despite a disproportionately heavy burden of major losses in the first half-year we generated net income after taxes in excess of €300m. This offers a good platform for achieving our 2010 profit target of around €600m".

Financial highlights (2009 in brackets)

• GWP €5.7bn (€5.3bn)
• Retained premium 90.3% (93.0%)
• Net premium earned €4.8bn (€4.5bn).
• Operating profit (EBIT) €490.7m (€603.3m).
• Group net income €310.6m (€433.5m)

Hannover Re said: “Prices on non-life reinsurance markets were for the most part adequate."

Non-life gross written premium rose 6.2% to reach €3.3bn (€3.1bn). At constant exchange rates, especially against the US dollar, growth would have been 4.6%. Net premium earned rose 6.3% to €2.6bn (€2.5bn).

The company said it could not yet calculate losses from the Deepwater Horizon drilling rig in the Gulf of Mexico. "The loss reserves that we have established – giving rise to a net strain of €89m – reflect all concrete and potential exposures of our portfolio from this loss complex that are currently known to us", Wallin said.

H1 net losses from major events totalled €407.6m (€163.3m). The non-life division's net underwriting result declined from €57.3m to €7.2m. The non-life operating profit (EBIT) increased by 5.3% €333.8m (€317.1m).Non-life net income fell by 3.6% to €215.1m (€223.2m).