Talanx First-Quarter Profit Falls on Retail Unit, Claims

Talanx AG, Germany’s third-biggest insurer, said first-quarter profit declined 7.7 percent on lower earnings at the German retail unit and higher claim payments.

Net income fell to 192 million euros ($263 million) from 208 million euros a year earlier, the Hanover, Germany-based insurer said in a statement today. Earnings compared with the 190 million-euro estimate of six analysts surveyed by Bloomberg.

Chief Executive Officer Herbert Haas confirmed a target for profit of at least 700 million euros this year. That compares to the 762 million euros reported for 2013, when the sale of Swiss Life Holding AG shares boosted profit by 100 million euros, of which 22 million euros was booked in the first quarter a year ago.

“Net income was within reach of the previous year’s strong quarter, which had profited from capital gains and exchange gains on the disposal of Swiss Life shares,” Haas said in the statement. “This is a good start to 2014.”

Large losses in the quarter rose to 41 million euros from 13 million euros a year ago with the biggest claim being the loss of Malaysia Airlines Flight MH370, which cost Talanx about 33 million euros. The losses compared to a full-year loss budget of 855 million euros.

Earnings at the German retail insurance unit, led since the beginning of the month by Jan Martin Wicke, fell 33 percent to 29 million euros.

Industrial Division

First-quarter profit at the industrial insurance division, which provides transport, liability and fire coverage for companies, rose to 35 million euros from 19 million euros a year earlier, helped by higher investment income from gains on disposals.

Talanx shares gained 7.3 percent this year valuing the company at 6.7 billion euros, compared with a 0.6 percent rise for the Bloomberg Europe 500 Insurance Index.

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. Talanx also holds a 5 percent stake in Zurich-based insurer Swiss Life Holding AG and 9.9 percent of financial-services broker MLP AG.

Hannover Re reported on May 7 that first-quarter profit was little changed as rates charged by the industry remain under pressure. It confirmed a full-year profit target of about 850 million euros.

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