Hannover Re Surpasses ’07 Net Profit Goal, Expects 15% Equity Return for ’08
Chief Executive Wilhelm Zeller of Hannover Re, the world's fourth-biggest reinsurer, stated that the company surpassed its goal of earning 700 million euros ($1.04 billion) in net profit last year and expects return on equity of at least 15 percent in 2008 despite a softening reinsurance market.
Hannover Re initially aimed to achieve return on equity of at least 15 percent last year, but later increased expected ROE to at least 20 percent, supported by a one-off German corporate tax windfall of 180 million euros.
"This forecast (for 2007) is not in danger. It will be exceeded," Zeller told a journalist briefing on Monday in remarks embargoed until Tuesday. The company is due to report 2007 results on March 12.
Zeller said hitting its ROE target this year meant earning at least 525 million euros. It also planned to keep its dividend payout ratio at 35-40 percent of net profit.
"We are raising our profit despite the beginnings of a softening market," Zeller said.
The company would examine share buy-backs once its capital needs and rating agency requirements became clear, but Zeller said its priority was to put any extra cash to work shouldering insurers' risks where possible.
"I would rather 100 times over invest in business opportunities than give it back," he said.
Hannover Re said its premiums remained largely stable in negotiations in January to renew contracts for the risk cover it sells to insurance companies. Prices were adequate.
Published on February 5, 2008
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