July 25 (Bloomberg) -- Hannover Re, Germany's second- biggest reinsurer, dropped the most since 2001 in Frankfurt after saying that capital-market turbulence has made it a bigger challenge for the company to reach its full-year goals.

Hannover Re plunged as much as 21 percent and declined 15.4 percent, or 4.97 euros, to 27.38 euros at 11:51 a.m., the biggest drop since Sept. 20, 2001.

``It will be more difficult to reach our targets if the markets don't improve,'' spokeswoman Christine Harms said in a telephone interview today. The Hannover-based company is ``evaluating'' the goals of earnings per share of about 5 euros ($7.87) and return on equity of more than 15 percent, she said.

Hannover Re, which reiterated the targets as recently as June 27, said declining stock markets and rising interest rates will reduce investment income. Larger rival Munich Re today cut its forecast after second-quarter profit declined 48 percent due to ``substantial'' writedowns on stock investments.

To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net.

Last Updated: July 25, 2008 05:57 EDT