No 2008 dividend for Hannover Re shareholders
Germany-based Hannover Re told investors yesterday that it won’t be paying a dividend this year as writedowns on investments and catastrophe payouts in the third quarter have set the company on track for its first ever annual loss.
Elke Koenig, Chief Financial Officer at Hannover, said to preserve the company’s capital, the board won’t be recommending a dividend this year.
She added that Hannover is not planning to raise capital, but expects to benefit from increased demand for reinsurance in 2009.
Chief executive Wilhelm Zeller told analysts that it is a ‘lost year’ for the company.
Hannover, the fourth largest reinsurer in the world, posted a third quarter loss of €395 million, wiping out the €252 million profit made during the first two quarters.
Higher than average storm claims, turmoil on the international capital markets, and German tax laws that deal unfavourably with financial losses have all hit the company hard.
Hurricanes Gustav and Ike cost the company €250 million, whilst writedowns on investments and unrealised losses were €200 million.
Gross premiums, however, increased 1.4% on year during the quarter to almost €2 billion, compared to €1.9 billion during the same period in 2007.
A statement from the company said it would be a ‘stretch’ to break even in the fourth quarter.
Shares in Hannover Re fell 4.6% yesterday afternoon following the news.
Category: Financials, Insurance News
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