Hannover Re Q1 Net Income up 7.6% to $136 Million

Germany’s Hannover Re’s first quarter earnings report expressed considerable satisfaction with its start to the new financial year. “With our quarterly result we have taken a first major step towards achieving our defined profit target for 2006,” CEO Wilhelm Zeller affirmed.

Highlights of the report included the following:
— Operating profit (EBIT) in total business climbed by 38.6 percent compared to the first quarter of the previous year to reach €214.3 million [$276.5 million], compared to €154.6 million [$199.5 million] in Q1 2005.
— Due to higher taxes net income “grew by a mere 7.6 percent to €105.7 million [$136.4 million,” compared to €98.3 million ($126.8 million) in Q1 2005.
— Earnings per share were 88 €cents ($1.135) compared to 81 €cents ($1.045) a share in the same period last year.
— Shareholders’ equity climbed by around €18 million ($23.2 million) compared to the position as of December 31, 2005 to reach €2.6 billion ($3.354 billion.
— Gross written premium totaled €2.8 billion ($3.612 billion), compared to €2.6 billion ($$3.354 billion), an increase of 8.9 percent relative to Q1 2005.

The bulletin noted that “market conditions in property and casualty reinsurance continued to be highly advantageous, and the company generated very profitable business.” Zeller also indicated that he was particularly satisfied with the favorable development of the specialty insurance business group and the revival of financial reinsurance. In life and health reinsurance also results came in as anticipated. “All underwriting business groups lived up to our expectations,” he concluded.

Zeller’s reference to specialty insurance carries particular relevance in the U.S., as following a drastic reorganization, Hannover Re transferred most of its ongoing U.S. activities from the Clarendon Group to the newly established Praetorian Financial Group. Clarendon “will now concentrate on the professional management of expired programs as well as on commodity business,” said the bulletin. “The results for the first quarter clearly show that in this business group, too, we are on the right track,” Zeller noted.

The bulletin stated: “Given the development of the various business groups described above, Hannover Re anticipates a very good result for the full 2006 financial year.” Zeller concluded: “Assuming that the burden of major losses remains within the multi-year average and there are no adverse movements on capital markets, we expect to achieve a return on equity of at least 15 percent. The company is looking to pay a dividend in the range of 35 percent to 40 percent of Group net income.”

The full earnings report and related information and comments may be obtained on the Group’s Website at: www.hannoverre.com.

Topics Profit Loss