Germany's Talanx sees 2010 profit dented by claims

HANOVER, Germany, June 8 (Reuters) - German insurer Talanx [HDIVGT.UL] expects earnings to decrease in 2010, as the group takes a hit from an earthquake in Chile, European winter storm Xynthia and the oil spill in the Gulf of Mexico.

"Given the higher claims expenditure anticipated for 2010 and the positive non-recurring (acquisition-related) effects in 2009, group net income in 2010 will not match up to the level of the financial year just-ended," the country's third-biggest insurance group said in a statement on Tuesday.

Talanx, which is not listed on the stock exchange but owns a 50.2 percent stake in the world's fourth biggest reinsurer Hannover Re (HNRGn.DE), expects the combined ratio -- a measure of profitability of insurers -- to deteriorate, but still to come in below 100 percent in 2010.

A combined ratio below 100 percent means costs and damage claims are less than premium income, signifying the insurer made an underwriting profit.

For 2009, Talanx reported a steep increase in earnings, mainly due to a recovery in investment income compared with 2008, when the company was hit by high writedowns in the financial crisis.

Group net income after minorities rose to 526 million euros ($705.7 million) from 183 million in 2008.

The combined ratio in the property/casualty insurance and the non-life reinsurance rose to 96.6 percent from 95.2 percent.

The results mirrored those of big European peers like Germany's Allianz (ALVG.DE), Italy's Assicurazioni Generali (GASI.MI), The Netherlands' Aegon (AEGN.AS) and Belgium's Ageas (AGES.BR), formerly known as Fortis, which recently reported strong first quarters as consumers' fears began to ease after the financial crisis. [ID:nLDE64B0UW]