Hannover Re reported preliminary full-year 2017 group net income of around €950 million, up from the €800 million it previously expected, adding that it was "highly satisfied" with the outcome of Jan. 1 treaty renewals.
"Even though this result falls short of the previous year's figure, it can nevertheless be considered satisfactory if we bear in mind that 2017 was dominated by natural catastrophe events, which caused insured losses substantially in excess of [$100 billion]," CEO Ulrich Wallin said.
The increase in gross premium is roughly 9%, in line with expectations. The company now expects a 3.8% return on investment, compared to the previous target of more than 3.0%.
The dividend for 2017 is expected to be on par with the previous year at €5.00 per share.
As of the Jan. 1, 2018, renewals in traditional property and casualty reinsurance, premium volume increased 12.7% against the backdrop of improved general environment.
The German reinsurer said that of the total premium volume of €7.13 billion booked in 2017 in traditional P&C reinsurance, excluding facultative business and structured reinsurance, treaties with a volume of €4.65 billion were up for renewal at the start of 2018 and a premium volume of €4.29 billion was renewed, while treaties worth €610 million were either cancelled or renewed in modified form. New treaties produced increases of €711 million.
For financial year 2018, Hannover Re expects net income to reach more than €1 billion, while return on investment is expected to be around 2.7%, provided that large loss expenditure does not exceed the budgeted level of €825 million and that there are no unforeseen distortions on capital markets.
The company expects a 2018 dividend payout ratio in the range of 35% to 40% of its group net income under International Financial Reporting Standards, which could increase if the company's comfortable level of capitalization remains unchanged.
Hannover Re is set to publish its full-year 2017 financial statement March 13.
