Hannover Re reports third quarter losses

Hannover Re’s third quarter results show a net expenditure on major losses of 781.4 million euros, which reflects the adverse affects of catastrophic losses that had already caused heavy losses of 93.3 million euro in the first quarter of 2005. Hannover expects to incur net loss expenditure of roughly 310 million euro before tax in connection with Hurricane Katrina. Hurricane Rita will result in a strain of around 130 million euro. These Hurricanes and other major losses incurred in the third quarter, such as the flooding in the Alpine region, damage to an oil platform in the Indian Ocean, numerous aviation claims and floods in India, produced a net burden of 754.6 million euro, equivalent to 76.7% of the net premium for the quarter. The total major loss expenditure for the first nine months thus amounted to 867.0 million euro (258.5 million euro); this figure represents 30.7% of the corresponding net premium, compared to the multi-year average of around 6%.The Company’s losses as of Sept. 30, 2005 totaled 893 million euro while its operating profit was reduced to 63.8 million euro or a decrease of 84.4% compared to the previous year (408 million euro). Group net income retreated by a 67.6% to 61.9 million euro due to favourable tax effects. In response to financial strains incurred as a result of hurricanes “Katrina” and “Rita”, Hannover Re has established global reserves in addition to individual loss reserves.Regardless of the negative catastrophic events, Hannover still generated a positive result for the first nine months.Hannover’s gross premium income increased by 2.2% to 7.3 billion euro and its retained premiums rose from 77.3% to 80.2%. Also on the rise is the Company’s net premiums earned, which grew by 2.9% to 5.6 billion euro.The Company’s gross premium income also increased by 10.8% to 3.6 billion euro and net premiums earned consequently rose by 13.8% to 2.8 billion euro.