Hannover Re, the world’s fourth- biggest reinsurer, said it expects earnings to remain little changed this year as tougher competition weighs on growth rates.
“Market conditions are increasingly competitive,” Chief Executive Officer Ulrich Wallin told reporters at the Hanover, Germany-based company’s headquarters on Feb. 1, when reiterating a profit target for this year. “As the results of the January renewal rounds are satisfying, we expect a good financial year in non-life reinsurance.”
The reinsurer forecasts full-year profit to reach about 800 million euros ($1.1 billion) this year, little changed from a target set for 2012. Global losses from natural catastrophes were cut in half in 2012, according to an estimate published by Munich Re, helping bolster earnings at insurers and reinsurers who help them shoulder risks for clients.
Hannover Re shares have climbed 47 percent over the past year, valuing the company at 7.2 billion euros.
Natural catastrophes caused $160 billion in losses and $65 billion in global insured losses in 2012, down from $400 billion and $119 billion, respectively, in the previous year, according to Munich Re, the world’s largest reinsurer.
Hannover Re (HNR1) said it increased its budget for major losses in 2013 by 65 million euros, reflecting higher premium volumes in non-life reinsurance. Premiums renewed in January rose 1 percent, with the “moderate” increase reflecting “significantly more intense competition,” it said.
About two-thirds of the property and casualty reinsurance contracts of carriers such as Munich Re, Swiss Re Ltd. and Hannover Re are typically up for renewal in January. The remainder is renewed in April and July.
Munich Re is scheduled to report preliminary 2012 figures on Feb. 5 before markets open in Germany.
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