Hannover Re confirmed its expectation of more than €1 billion in 2018 profit as it reported full-year 2017 group net income of €958.6 million, down from €1.17 billion a year ago.
EPS stood at €7.95, compared to €9.71 in 2016. Return on equity also dropped to 10.9% from 13.7%.
Gross written premium increased to €17.79 billion from €16.35 billion in 2016. Net earned premiums came in at €15.63 billion, up on a yearly basis from €14.41 billion. Net investment income also rose to €1.77 billion from €1.55 billion a year earlier.
The German insurer reported a year-over-year increase in claims and claims expenses to €12.19 billion from €10.81 billion. Its total major loss expenditure amounted to €1.13 billion in 2017, far exceeding its large loss budget of €825 million, due to multiple serious natural disasters.
The underwriting result at Hannover Re's property and casualty reinsurance business, including interest and expenses on funds withheld and contract deposits, fell to €15.5 million from €503.1 million owing to the high burden of losses. The combined ratio rose to 99.8% from 93.7% in 2016.
Hannover Re said its expected full-year 2018 income is based on a premise that its major loss expenditure does not significantly exceed the budgeted level of €825 million, and that there are no exceptional distortions on capital markets.
