Hannover Re reiterates 2014 profit goal after Jan renewals
FRANKFURT Feb 6 (Reuters) - Germany's Hannover Re stuck by its aim of earning around 850 million euros ($1.15 billion) in net profit this year after securing acceptable margins on reinsurance contracts it renewed with insurance companies in January.
"We are well placed to achieve our 2014 profit target despite challenging conditions in non-life reinsurance," Chief Executive Ulrich Wallin said in a statement on Thursday.
Reinsurers, which help insurers shoulder risks in exchange for part of the profit, have had a buoyant few years, but are now facing one of the biggest market-wide price declines since the late 1990s as their customers press for a better deal.
Wallin said Hannover attained margins that were adequate for the risks it was taking on its books as of January, walking away from business where the prices were too low.
Hannover was able to push through rate increases in areas that saw big claims, such as for flooding in Germany and Canada.
The company saw premium volume on renewed business contract by 2 percent to 3.83 billion euros, with conditions broadly unchanged, it said.
"We are satisfied with the rate level of our renewed portfolio; profitability is likely to remain largely stable relative to 2013," Wallin said.
Hannover Re, the world's third biggest reinsurer after Munich Re and Swiss Re, said it saw growth potential in Asian-Pacific markets, Latin America, the countries of Central and Eastern Europe and in marine business.
The company expects stable or slightly higher gross premium volume on its whole book of business in 2014, it said, adding that it would maintain its dividend payout ratio at 35-40 percent of net profit. ($1 = 0.7390 euros) (Reporting by Jonathan Gould, editing by Louise Heavebs)