Talanx Group reports record-breaking €1 billion H1 net income
Talanx Group reports record-breaking €1 billion H1 net income | Insurance Business Canada
Insurance News
Talanx Group reports record-breaking €1 billion H1 net income
Notable income growth observed despite elevated large loss payments
Insurance News
By
Kenneth Araullo
Talanx Group has reported significant growth in insurance revenue and net income for the first half of 2024.
Insurance revenue increased by 13% year-on-year to €23.6 billion, while group net income surged 32% to €1.09 billion. This marks the first time the company’s H1 net income surpassed €1 billion.
The operating profit (EBIT) also rose by 28% to €2.5 billion, driven primarily by strong performances in the group’s reinsurance and primary insurance segments. Primary Insurance, in particular, increased its insurance revenue by 23%, contributing 48% to the group’s net income, up from 44% the previous year.
Despite higher large loss payments in Q2, the insurance service result improved, and return on equity reached 20.3%, exceeding the strategic target of 10%. The group noted that it plans to reassess its 2024 targets after Q3.
The insurance service result grew 43% to €2.3 billion, benefiting from large loss payments that remained within budget. Total large loss payments for H1 amounted to €750 million, with €202 million from man-made events and €547 million from natural disasters.
Significant losses included €174 million from floods in southern Germany, €101 million from floods in Brazil, and €82 million from unrest in New Caledonia. Despite these events, the combined ratio improved to 91.2%, with a fully utilised pro rata large loss budget of €1.1 billion.
The net insurance financial and investment result before currency effects remained steady at €784 million. The group’s Solvency 2 ratio as of 30 June 2024 stood at 218%, slightly up from 217% at the end of March.
Talanx reinsurance – how did it fare?
The reinsurance division reported a 5% rise in insurance revenue to €12.9 billion, supported by strong performance in the property and casualty reinsurance segment. The insurance service result jumped by 31% to €1.4 billion, while the net insurance financial and investment result before currency effects remained stable at €528 million.
Operating profit increased by 23% to €1.7 billion, with the division’s contribution to group net income rising by 21% to €585 million.
In the property and casualty reinsurance segment, insurance revenue grew by 9% to €9.1 billion, and the insurance service result increased by 61% to €963 million. Large loss payments amounted to €567 million, within the budget of €801 million. Significant losses included €120 million from floods in southern Germany and €82 million from unrest in New Caledonia.
The combined ratio improved to 87.8%, below the full-year target of less than 89%. The net insurance financial and investment result before currency effects rose by 11% to €396 million, and operating profit surged by 39% to €1.173 billion.
In the life and health reinsurance segment, insurance revenue declined slightly to €3.8 billion, in line with expectations. The insurance service result, at €448 million, remains on track to meet the full-year target of over €850 million, driven by strong demand in the financial solutions business. The net insurance financial and investment result before currency effects was €131 million, with operating profit reaching €497 million.
Firm continues to “reap the rewards”
The Talanx Group has also confirmed its target of achieving group net income exceeding €1.7 billion for 2024, expressing confidence in surpassing this figure. The group also maintains its return on equity target of over 15%.
The forecast for the year will be reviewed after the hurricane season in Q3, with new medium-term targets to be announced during the Capital Markets Day on 11 December 2024.
“We are continuing to reap the rewards of our focused strategy. We are generating strong, profitable growth both in our organic business and at our acquisitions”, said Torsten Leue, chairman of the board of management of Talanx AG.
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