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Daily Insurance Industry News
Tuesday 20th of February 2018
October 22, 2008

Hannover Re reports difficult Q3

by David Masters

Story link: Hannover Re reports difficult Q3

Hannover Re has said that it will not be seeking assistance from the German government’s financial bailout package despite reporting a nine month net loss of €140 million.

The world’s fourth largest reinsurer heavily revised its 2008 outlook after its third quarter results were hard hit from dramatic falls in the value of its equity investment, and higher than expected claims from natural disasters.

Hannover Re said a return on equity investment in excess of 15% is no longer achievable.

Despite the net loss for the first three quarters of 2008 the company has made an operating profit during the period.

Net investment, however, has been hit with writedowns and unrealised losses of €466 million.

Analysts said the size of the writedown is ‘shocking’ and demonstrates severe miscalculation by the company.

Hannover Re, however, is adamant that it will not draw upon the German government’s €500 billion rescue package of loan guarantees and capital injections because the company does not have any problems with liquidity or refinancing.

Shares in Hannover Re fell 13% following the announcement, giving the company a value of €2.3 billion.

 

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