HDI Global sees H1 growth amid large loss challenges

HDI Global sees H1 growth amid large loss challenges | Insurance Business Asia

Insurance News

HDI Global sees H1 growth amid large loss challenges

The forecast for the second half is positive but approached with caution

Insurance News

By
Kenneth Araullo

HDI Global SE, member of the Talanx Group, has reported positive financial results for the first half of 2024, with growth observed in both revenue and earnings. The company attributes this performance to an increase in new business and inflation-related price adjustments.

The combined ratio stands at 91.1%, an improvement from 93.1% in the same period last year. Insurance revenue reached €4.8 billion, up from €4.2 billion. Operating profit (EBIT) rose to €305 million, compared to €190 million in the previous year.

Despite a significant portion of large losses being attributed to natural catastrophe (NatCat) events, and with a strong hurricane season anticipated, the outlook for the second half of the year remains cautiously optimistic.

HDI Global’s CEO, Dr Edgar Puls (pictured attached), highlighted the company’s performance amid the challenging global environment, noting that the results underscore the firm’s commitment to providing tailored insurance solutions.

Puls emphasised the importance of their underwriting discipline and the trust placed in them by clients and broker partners, which has allowed HDI Global to maintain its role as a long-term partner in transformation.

The first half of the year saw HDI Global achieve a 14% year-on-year increase in insurance revenue, which totalled €4.8 billion. This growth, consistent even after adjusting for currency effects, was largely driven by new business and inflation-related pricing adjustments within the property, liability, and specialty insurance sectors. The insurance service result increased by 47%, reaching €429 million, largely due to an improved loss ratio for frequency losses.

Puls pointed out that the rise in large losses was predominantly due to NatCat events, reflecting a broader global trend related to the impacts of climate change. He stressed the need for global transformation and adaptation in response to these challenges.

HDI Global noted that it remains committed to supporting transitions in areas such as mobility, digitalisation, new energy sources, and the growing role of generative AI. The company’s financial stability and customised solutions for emerging risks are seen as critical in helping clients navigate these ongoing changes.

Large loss payments totalled €128 million, slightly below the pro rata budget for the period by €86 million. The combined ratio improved to 91.1% from 93.1% the previous year. The net insurance financial and investment result, excluding currency effects, increased to €68 million, driven by higher investment volumes and an increase in current interest income.

HDI Global’s operating profit rose to €305 million, contributing €223 million to Talanx Group’s net income, up from €151 million.

Looking ahead, Puls acknowledged the potential challenges posed by the upcoming hurricane season but expressed confidence in HDI Global’s ability to remain a stable and reliable partner in the global insurance industry.

He highlighted the importance of maintaining close relationships with broker partners and clients to address the evolving risk transfer needs of the global market.

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