Hannover Re Says Capital permits consistent Dividend, capability Acquisitions

Hannover Re, the world’s 0.33- biggest reinsurer, has sufficient capital to offer investors a regular dividend and pursue potential purchases, chief executive Officer Ulrich Wallin stated.

“we've extended our capital over the past years in order that we're now, theoretically, at an AAA level,” Wallin stated in an interview in Munich. “That lets in us to offer investors a non-stop dividend payout, as well as seize possibilities for aggressive growth need to they arise.”

Hannover Re, which carries an AA- credit score with a stable outlook from fashionable & terrible’s, improved its capital base, which include shareholders’ equity, non-controlling interests and hybrid capital, to 8.eight billion euros ($12.1 billion) in 2013 from 5.6 billion euros in 2009.

The reinsurer stated ultimate month it plans to maintain its payout to investors at 3 euros a share for 2013, or forty percent of internet profits. under Wallin’s predecessor, Wilhelm Zeller, it scrapped the dividend for 2008 following impairments on investments and catastrophe claims.

“opportunities for mergers and acquisitions are restrained in the meanwhile as enterprise profits are doing properly and objectives are consequently rather pricey,” Wallin said. “no matter our extraordinarily sturdy capitalization, we're nonetheless able to meet our return on equity goals way to the coolest profitability of our enterprise.”

feasible Buyback

Hannover Re closing month mentioned report full-yr internet profits of 895.five million euros for 2013 and confirmed a income target for this 12 months of 850 million euros. go back on equity, a degree of profitability, stood at 15 percent on the end of ultimate yr, above the corporation’s minimum target of nine.8 percent.

“we'd don't forget a percentage buyback if we would face troubles meeting our go back on fairness targets due to an excessive amount of capital,” Wallin stated. “obviously, our principal shareholder Talanx prefers dividend bills to a percentage buyback.”

Talanx AG, Germany’s 0.33-largest insurer, owns 50.2 percentage of the Hanover, Germany-based reinsurer.

charges charged by reinsurers, which help primary insurers shoulder dangers, “will probable remain underneath strain as a minimum this 12 months and subsequent till either a chief disaster absorbs plenty of the enterprise’s excess capital or when underwriting income change into losses,” Wallin stated, adding that Hannover Re is confident concerning its profitability due to its “comparatively low constant costs.”

Hannover Re’s stocks rose 2.eight percentage this yr, in comparison with a 0.eight percent develop for the Bloomberg Europe 500 coverage Index.

Munich Re, the world’s biggest reinsurer, said in February it will growth its dividend after fourth-sector profit beat estimates on decrease catastrophe-related expenses. Swiss Re Ltd., the No. 2 reinsurer, additionally boosted its proposed payout for 2013 after fourth-sector profit handed analysts’ estimates.