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Talanx FY'17 net income drops after 'unprecedented' nat cat losses

Talanx AG reported full-year 2017 net income attributable to shareholders of €672 million, down from an adjusted €903 million in 2016, on the back of "unprecedented losses due to natural disasters."

EPS for 2017 stood at €2.66, compared to €3.57 a year earlier. Return on equity stood at 7.5%, down from 10.4%.

Gross written premiums, including premiums from unit-linked life and annuity insurance, rose on a yearly basis to €33.06 billion from €31.11 billion. Net premiums earned increased to €27.42 billion from €25.74 billion.

Talanx also booked net investment income of €4.48 billion in 2017, compared to €4.02 billion in 2016. Net income from assets under own management rose year over year to €4.26 billion from €3.70 billion.

Net claims and expenses amounted to €23.27 billion, up from the year-ago €21.20 billion. The company also noted that at €1.62 billion, the net group's large-loss burden was up nearly 100% from €883 million a year ago and remained well over the large-loss budget of €1.12 billion. In particular, Hurricanes Harvey, Irma and Maria, which hit parts of the U.S. and the Caribbean in the third quarter, as well as the earthquakes in Mexico, resulted in "extraordinarily high" large losses in 2017.

The combined ratio in property and casualty primary insurance and reinsurance was 100.4%, compared to the year-ago 95.7%.

The company's management and supervisory boards will propose a dividend of €1.40 per share for 2017, up from €1.35 per share a year earlier.

For 2018, Talanx said it expects a group net income of approximately €850 million and an increase of more than 2% in gross premiums, with ROE of around 9%, assuming that any large losses will be within the expected range and that there will be no disruptions on the currency and capital markets.

The German insurer noted that 2016 figures were adjusted in accordance with IAS 8.