Reinsurers are currently confronted with the consequences of the war and the pandemic, but also with losses from natural catastrophes.
(Photo: dpa)
Frankfurt Despite higher losses from natural disasters, the war in Ukraine and the ongoing corona pandemic, the Dax group Hannover Re has confirmed its profit target. The reinsurer wants to continue to earn 1.4 billion to 1.5 billion euros for the year as a whole. Hannover Re announced this on Wednesday.
In the first quarter of 2022, however, net profit fell to 264 million euros after 306 million euros in the same quarter of the previous year. According to data provider Bloomberg, analysts had expected an average of only 215 million euros. The return on equity fell from 11.1 percent to 9.3 percent.
Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re, said: “While the suffering that Russia caused in the war against Ukraine shocks us all, the economic consequences cannot yet be specifically quantified from today’s perspective.”
The underwriting of new risks or the renewal of contracts with customers in Russia and Belarus have been paused until further notice. For possible burdens from the war, the group made an additional general provision in the low three-digit million amount in the first quarter.
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In addition to possible consequences from the Ukraine war, the group had to process numerous natural catastrophes and other pandemic burdens in life and health reinsurance in the first three months of the year, Henchoz said. The burdens from major losses reached 336 million euros and were above the estimated figure of 284 million euros for the first quarter.
Munich Re and Swiss Re will present figures shortly
The floods in Australia caused by heavy rainfall, the storm “Ylenia/Zeynep” in Europe and the cargo ship “Felicity Ace”, which sank after a fire, were responsible for the largest individual losses.
Meanwhile, gross written premium rose by 19.5 percent to EUR 9.3 billion in the first three months of the year. In the same quarter of the previous year, gross premiums amounted to EUR 7.8 billion.
While the market leaders Munich Re and Swiss Re will only present their quarterly results in the next few days, the French reinsurer Scor, number four in the industry, has already announced that it will also have a high double-digit burden for the first quarter due to the war in Ukraine expected to be in the millions. In combination with the losses from natural catastrophes and the ongoing effects of the pandemic, the Group expects a loss in the first three months of the year.
The Annual General Meeting is also taking place at Hannover Re this Wednesday. The shareholders are to vote on a basic dividend of EUR 4.50 per share and a special dividend of EUR 1.25 per share. Berenberg analyst Kathryn Fear recently criticized that the dividend was lower than expected. The stock has been down a good 12 percent since the beginning of the year.
More: Hannover Re raises dividend to record level