Talanx lifts premium growth guidance

Talanx, the parent company of HDI Global, has confirmed it expects annual net income in a range of €1.05-1.15 billion ($1.56-1.71 billion) and lifted its premium growth guidance.

Premiums will increase by a “high single-figure percentage” this year, it now says. Previous guidance was for a mid-range single-figure percentage increase.

In the first half, gross written premium rose 18% to €28.3 billion ($40.76 billion), with Australia contributing 8%. In the second quarter, GWP rose 19% to €12.4 billion ($17.86 billion) and the underwriting result improved sharply year-on-year to a loss of €75 million ($108.03 million).

The top two loss events in the first half were the Russian war in Ukraine – €346 million ($498.32 million) – and floods in Australia – €258.8 million ($373.05 million).

“Large losses from natural disasters – due among other things to the consequences of climate change – were up substantially on the comparative period and left a clear mark on the first half,” Talanx said. “The largest losses in this area related to the flooding in Australia.”

Total large losses amounted to €1.08 billion ($1.58 billion), exceeding the budget by €267 million ($384.58 million).

First-half net income rose 3% to €560 million ($806.58 million), though the combined ratio widened to 98.4%, from 95.9% a year earlier, partly on “precautionary additions” to reserves for the war in Ukraine.

“This was due to a return to a more normal level of losses as mobility rose again following the end of the lockdown, a cluster of large losses, the potential impact of Russia’s war of aggression against Ukraine and the current rise in inflation,” Talanx said. A large majority of the Ukraine provisions related to losses that have “probably already been incurred but have not yet been reported”.

Chairman Torsten Leue was reappointed by the board and has extended his contract until 2028.

“Our strong double-digit premium growth shows firstly that we are already reacting to the high level of inflation by adjusting our prices and secondly how robust our new business is. This has boosted our resilience further and positioned us to operate in this challenging market environment,” Mr Leue said.