Hannover Re, the world’s fifth largest reinsurer, warned that net profits this year will be 37 percent less than in the year 2000 at around €230 million ($195.5 million), even as gross premiums rise.
The company stressed that due to changes in German tax laws it had received a one time only benefit of around €200 million ($170 million) last year, which wouldn’t recur. It also expects the current weakness in equity markets to reduce earnings on investments.
Hannover Re’s gross premium income, however, continues to rise. It reported a 24 percent overall net increase last year, writing more than € 8.3 billion ($7 billion) worth of reinsurance, while losses from natural disaster decreased substantially from 1999’s near-record figures.
The increases were helped by strong growth in the U.S. life market, which rose by 23 percent and growth in financial reinsurance, which increased by 71 percent.
As rates in all reinsurance sectors continue to harden, Hannover Re confirmed its goal of a double digit rise in gross premiums for the current year.
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