Talanx Quarterly Net Rises Helped by Industrial Insurance

Talanx AG (TLX), Germany’s third-biggest insurer, said fourth-quarter profit tripled after higher earnings at its industrial insurance business and lower tax at its reinsurance unit.

Net income rose to 227 million euros ($313 million) from 76 million euros a year earlier, the Hanover, Germany-based insurer said in a statement today. That beat the 182 million-euro average estimate of six analysts surveyed by Bloomberg.

Full-year profit climbed 22 percent to 762 million euros, exceeding Talanx’s goal of 700 million euros, which was set in August after the sale of Swiss Life Holding AG (SLHN) shares boosted earnings by about 100 million euros. Chief Executive Officer Herbert Haas is targeting profit of at least 700 million euros this year.

Talanx raised its budget for large claims for 2014 to 185 million euros from 80 million euros in primary insurance and to 670 million euros from 625 million euros for its reinsurer Hannover Re.

Fourth-quarter profit at the industrial division, which provides transport, liability and fire insurance for companies, rose to 74 million euros from 23 million euros a year ago, helped by a positive run-off result. Earnings at the German retail insurance unit, the company’s biggest in terms of premiums, rose 3 percent to 15 million euros in the quarter.

The insurer said last week that management board member Heinz-Peter Ross, who heads its German retail operations, will leave the company by the end of June.

Rates Pressure

Talanx, which sold shares in an initial public offering in 2012, owns 50.2 percent of Hannover Re, the world’s third-biggest reinsurer led by CEO Ulrich Wallin. It also holds a 5 percent stake in Zurich-based insurer Swiss Life and 9.9 percent in German financial services broker MLP AG. (MLP)

Hannover Re dropped the most in eight months in Frankfurt trading on March 11 after fourth-quarter operating profit missed analysts’ estimates. Prices charged by reinsurers, which help primary insurers shoulder risks, are under pressure because of lower-than-average disaster losses and as the supply of capital is boosted by pension fund money that competes with traditional reinsurers through catastrophe bonds and other types of insurance-linked securities.

Talanx shares rose 1.4 percent this year, compared with a 2.4 percent gain for Hannover Re and a drop of 1 percent for the 33-member Bloomberg Europe 500 Insurance Index.

To contact the reporter on this story: Oliver Suess in Munich at osuess@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Dylan Griffiths, Cindy Roberts

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