Wednesday, August 7, 2013

Insurance: Hannover Re Reports Earnings Up 29%, Makes Munich Re Look Incompetent

When the guys from München reported disappointing results yesterday, operating profit down 46%, net down 35%, they really stressed the impact of this spring's Central European floods and the "poor" investment climate.
This morning Hannover Re reported, here's Bloomberg:
Hannover Re Quarterly Net Rises 29 Percent on Investment Income
Hannover Re (HNR1), the world’s fourth-biggest reinsurer, said second-quarter profit rose 29 percent, beating analysts’ estimates, helped by higher investment income.

Net income advanced to 186.3 million euros ($247.9 million) from 144 million euros a year ago, the Hanover, Germany-based company said in a statement today. That compared with a 173.4 million-euro average estimate of nine analysts surveyed by Bloomberg.

Hannover Re, led by Chief Executive Officer Ulrich Wallin, confirmed its full-year profit forecast of about 800 million euros after floods in Germany, Austria and the Czech Republic resulted in net claims of 136.9 million euros. The reinsurer said in June that its costs for the floods probably won’t exceed its budget for major disaster claims.

Net investment income rose 24 percent to 334.3 million euros in the quarter from a year earlier, Hannover Re said....MORE
Meanwhile the Reuters report stresses how property/casualty business was a driver:

Hannover Re profit driven up 30 pct by non-life business
* Q2 net profit 186 mln eur vs poll 176 mln
* H1 major damage claims totalled 260 mln eur
* Share up 2.3 percent vs flat insurance index (Adds CFO comment from call, analyst comment)
Hannover Re posted a better than expected 30 percent rise in second quarter net profit, helped by a strong performance in reinsurance on cars and homes.

Quarterly net profit at the world's third biggest reinsurer rose to 186 million euros ($248 million) from 144 million in the year earlier quarter, outpacing the average forecast of 176 million euros in a Reuters poll.
"Property casualty reinsurance did extraordinarily well despite a range of large claims in the second quarter," Chief Financial Officer Roland Vogel told journalists.

Hannover Re's hit from large losses was 260 million euros in the first half of the year, most of which fell in the second quarter, including 137 million for European floods in June....MORE

So there you have it.
Two companies in the same business in the same markets with wildly divergent results. 
Hannover stock is up 1.72 EUR  (3.04 %) at 58.27; yesterday Munich got spanked for 4.9 percent to 145.25 euros and is down another 1.05 today.