Germany — German reinsurer Hannover Re AG reported Thursday record net income of euro731 million ($994 million) for 2009, compared with a loss a year earlier, due to moderate claims, contributions from an acquisition and increased premiums.
The result was the highest annual figure in the company’s history and its pretax operating profit, at euro1.1 billion, was also a record.
The company, based in Hanover, reported a loss of euro127 million in 2008.
Gross written premiums, a measure of sales, increased nearly 27 percent in 2009 to euro10.3 billion from euro8.1 billion in 2008.
“Hannover Re noted increased demand for reinsurance protection in the year under review because the financial crisis had weakened the capital resources and solvency position of many life insurers”, Ulrich Wallin, the company’s chief executive, said in the report.
Hannover Re is Germany’s second largest reinsurer after Munich Re AG. Reinsurers sell backup coverage to spread the risk in the event of catastrophic claims.
The company benefited from its acquisition of ING’s U.S. life reinsurance portfolio last year, a move that strengthened sales and earnings. The ING unit has premium income in excess of $1 billion.
Claims charges were just euro240 million in 2009, below expectations. They came from Australian bush fires, the Air France Atlantic Ocean airplane crash and a fierce European winter storm.
For 2010, Hannover said it anticipated charges of euro185 million from the Chile earthquake and euro40 million from Xynthia, a volatile storm that claimed dozens of lives in France and Germany.
Hannover Re said non-life reinsurance premiums should grow about 4 percent this year and contribute to a “healthy” profit. In the life and health reinsurance, the company expects premiums to grow by 10 percent.
The forecasts are based on expectations that catastrophic losses won’t rise above euro500 million and that capital markets won’t experience “drastically adverse movements.”
Shares of Hannover Re were 1.3 percent higher at euro33.88 in Frankfurt afternoon trading.