Hannover Re reports rising profits

by David Masters

Story link: Hannover Re reports rising profits

Germany-based Hannover Re AG has announced its first quarter results, beating analysts’ expectations with profits up 23% on year.

First quarter profits for the world’s fourth biggest reinsurer totalled €151.5 million, or €1.26 per share. This is compared to profits of €123.5 million (€1.02 per share) for the first quarter of 2007.

Reinsurance companies make their money by selling insurance to insurance companies, serving as a back up and spreading the risk. Many reinsurers have been hard hit by the credit crisis.

Analysts, however, had predicted that Hannover’s profits would be up - at around €130 million - but weren’t prepared for such excellent results.

Hannover is attributing the results to better investments, and lower costs on disaster claims.

Despite rising profits, the company’s gross premium fell 5.5% to €2.28 billion, compared to €2.41 billion for the first quarter of 2007.

CEO Wilhelm Zeller says that the group is on track to reach its projected profits for 2008.