The German reinsurer states that its first-quarter 2020 results were not significantly impacted by the global spread of the coronavirus as they also benefitted from lower other charges.
At this time, Hannover Re says that widespread uncertainty remains and as such, it’s too early to estimate the expected negative impacts of the current crisis over the course of 2020. Hannover Re says that both the investment result and property and casualty reinsurance may see increased burdens from the pandemic.
Based on preliminary figures, Hannover Re estimates that Group net income will reach about €300 million in the first-quarter of 2020, compared with €293.7 million in Q1 2019. Operating profit is expected to hit €426 million in Q1 2020, against €450 million in Q1 2019.
The significant levels of financial market volatility and equity market stress has had an impact on reinsurers’ solvency ratios at the end of the first-quarter. However, Hannover Re notes that as at the end of Q1, and hence allowing for considerable volatility in interest rates and credit spreads, its solvency ratio remains comfortably above the limit and threshold.
The reinsurer is scheduled to announce its results in early May, when the financial impact of the COVID-19 coronavirus on its performance will become clearer. As noted by Hannover Re, the impacts from the pandemic are expected to be limited in the first-quarter of the year, but the duration and severity of the crisis suggests that impacts will be felt in future quarters.
The announcement from Hannover Re comes weeks after European reinsurance giant Munich Re withdrew its 2020 profit guidance in view of the current crisis.