Talanx: More profit despite the flood – economy

Only a few building owners insured their homes against natural hazards before the big storms in western Germany – this is why a large number of them do not receive money from insurance companies for damage caused by flooding. The Hanover-based insurance group Talanx is currently also affected by this topic. The flood disaster rekindled the debate on compulsory basic insurance. German insurers do not support them. From the point of view of Talanx CFO Jan Wicke, however, it might make sense to integrate natural hazards into building insurance in the future, which should be actively rejected. This could lead to more clarity in the counseling situation, he explains. The reinsurer Munich Re is also in favor of such an opt-out solution.

For the third quarter, Talanx expects the flood to have a negative impact on earnings of 150 million euros, of which around 50 million euros in primary insurance with end customers and 100 million euros in reinsurance. Nevertheless, the group has raised its profit target for the whole of 2021: the insurance company now expects a profit of 900 to 950 million euros. So far, there has been talk of 800 to 900 million euros.

“We can raise our outlook despite the devastating floods,” said CFO Wicke. Because in the first six months the company made 546 million euros, much more than the 325 million euros of the previous year. Turnover also increased, by nine percent to 24 billion euros.

The increase in profits is also due to the fact that there was less damage as a result of the corona pandemic in 2021. In 2020, the company paid large sums for event cancellations and shutdowns. companies. The group’s reinsurer, Hannover Re, suffered high losses: Covid-19 infections caused an increase in mortality. This will still apply in 2020, but the total burden due to the coronavirus will decrease: In the first half of 2020, the pandemic cost the group 278 million euros. This year, however, it was only 72 million euros.

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