UPDATE 1-Mild weather helps insurer Topdanmark beat forecasts

Tue Nov 13, 2012 8:10am EST

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By Johan Ahlander

COPENHAGEN, Nov 13 (Reuters) - Danish insurance company Topdanmark beat profit forecasts and raised its guidance for full-year earnings as mild weather led to fewer claims and as the return on its investments rose.

Weather-related claims fell to just 12 million in the third quarter, compared to 140 million last year when a rainstorm hit the Copenhagen area.

Return on investments rose to 413 million Danish crowns ($70.39 million) in the quarter, compared to a loss of 119 million last year.

The company raised its full-year net profit guidance to between 1.55 billion and 1.65 billion Danish crowns instead of a previously guided range of 1.30 billion to 1.40 billion crowns.

Net profit in the third quarter surged to 523 million Danish crowns ($89.14 million) from a loss of 53 million in the corresponding period last year, beating forecasts of 345 million crown profit in a Reuters poll of analysts.

Shares in the company fell 2.8 percent at 1250 GMT, underperforming the Copenhagen benchmark index which was down 0.4 percent.

The company kept its full-year outlook for premium growth unchanged in the life insurance unit at around 1-2 percent but trimmed its combined ratio outlook.

It said it expected 2012 combined ratio - a measure of insurers' profitability - of around 89 percent instead of a previous forecast of around 90 percent. A figure below 100 means underwriting is profitable. The lower the figure the better.

Third-quarter combined ratio improved to 88.9 percent from 91.8 percent a year ago.

The company also expanded its buy-back programme for 2012 by 250 million crowns to 1.7 billion crowns.

Last week, Danish rival Tryg also reported forecast-beating quarterly profits helped by mild weather and cost cuts. ($1 = 5.8670 Danish crowns) (Editing by Louise Heavens)

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