German reinsurance giant Hannover Re has reported a 10.5% increase in its net income for the full year (FY) 2018 to €1.05bn, compared to €958.6m for FY 2017.

Hannover Re

Hannover Re office building in Hannover, Germany. (Credit: Hannover Re)

Hannover Re said that its gross premium volume surged by 7.8% in 2018 to €19.2bn compared to €17.8bn in the previous year.

The firm noted that in spite of a challenging market environment, attractive business opportunities opened up during 2018 resulting in the growth in the gross premium volume.

Its operating profit (EBIT) for the year under review was up by 17% to €1.6bn compared to €1.36bn in FY 2017. The company said that the difference in the two figures was due to unusually high expenditure incurred on natural catastrophes in the previous financial year.

According to Hannover Re, the result was backed by excellent investment income and also the good underlying quality of the portfolio across property and casualty, and life and health reinsurance. The company’s earnings per share turned out to be €8.79, which is a 10.5% increase from the FY 2017 figure of €7.95.

The group’s property and casualty reinsurance’s gross premium volume increased by 11.8% to €12.0bn from the figure of €10.7bn reported in the previous financial year.

The net income contributed by the property and casualty reinsurance unit surged 11.0% to €929.1m from the previous year figure of €837.3m.

On the other hand, Hannover Re’s life and health reinsurance unit reported a gross premium volume of €7.2bn, which marks a 1.7% increase from the previous year’s figure of €7.1bn. The group net income in the sector moved up 7.7% to €185.9m compared to FY 2017’s €172.6m figure.

Based on the results, the German reinsurance company has proposed a dividend of €5.25 per share for FY 2018 compared to the dividend of €5.00 per share in FY 2017.

Hannover Re CEO Ulrich Wallin said: “The 2018 financial year once again bears witness to the profitability of Hannover Re.

“I am particularly pleased that we achieved a double-digit return on equity for the tenth consecutive year. Despite another significant burden of large losses and a substantial one-time charge in life and health reinsurance, we are again able to hold out the prospect of an attractive dividend for our shareholders.”