Hannover Re Earnings: Slightly Better-Than-Expected Profits; Shares Fairly Valued

Hannover Re has reported a strong set of earnings for the first 9 months as net income has risen to EUR 1.4 billion, leaving Hannover Re slightly ahead of our EUR 1.6 billion full-year forecast. Risk-adjusted price rises that the business has achieved in property and casualty renewals over the year, along with lighter major losses of EUR 1.2 billion versus the EUR 1.3 billion budget, have helped. However, so has a double-digit rise in investment income, leaving the business on track to achieve its guidance for full-year operating profit of EUR 1.6 billion. Group investment income looks to be below our full-year forecast. In life and health reinsurance it has mainly been the financial solutions business, as well as some longevity, that has driven a better result. A life and health reinsurance operating profit of EUR 730 million leaves the business well on track versus our EUR 808 million full-year forecast.