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Daily Insurance Industry News
Monday 24th of September 2018
July 31, 2009

Euler Hermes profit plummets 99%

by David Masters

Story link: Euler Hermes profit plummets 99%

Euler Hermes profit plummets 99%

Euler Hermes’ first half profits slumped 99%, the credit insurer reported this week.

The Allianz-owned unit, hit by higher claims, saw profits slide to €0.7 million, down from €122.3 million in the first half of 2008.

Overall the company posted a technical loss of €59.5 million. However, this was offset by investment earnings.

Chairman Wilfried Verstraete blamed the result on a “deteriorating” economic climate.

“Many companies’ sales contracted and their cash positions worsened, resulting in a significant increase in the number of corporate failures since the beginning of the year”, Verstraete said.

“The current crisis has also impacted Euler Hermes, with earned premiums eroded by the drop in insured sales linked directly to the very difficult economic conditions and a rise in claims, which weighed on group profitability.”

He added that the overall result was “positive” given market conditions.

Euler Hermes expects the number of corporate failures to rise by an additional 35% in 2009 as the global economy remains “fragile”.

“Against this background, Euler Hermes does not foresee any significant improvement in the level of results before 2010″, the company said.

 

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