By Jorge Porter?/?Business News Americas
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The contribution of Mexican insurer Metropolitana, as well as an acquisition in Poland and the reallocation of its Austrian retail business, were the main factors driving a 26% increase in German insurance group Talanx's retail international division in January-September.
Talanx announced the purchase of P&C and life insurer Metropolitana in 2011 for US$100mn, and closed the deal on January 1.
Talanx's retail international division saw gross written premiums grow to 2.23bn euros (US$2.84bn) in January-September mainly thanks to a 29% expansion in its P&C business, according to the group's latest interim report.
The segment's operating result grew almost fivefold in January-September compared to the same period 2011 to 75mn euros as net investment income expanded by 79% and underwriting losses were halved to 25mn euros.
The retail international division's combined ratio improved by 2.1 percentage points to 97.8%. The new companies (Poland's Warta and Metropolitana) were particularly significant factors here, Talanx said.
LATIN AMERICA
Around three quarters of Talanx's total premium income in Latin America comes from the Brazilian market, where its retail international division operates mainly in motor insurance.
Brazilian insurer HDI Seguros' written premiums stagnated in January-September compared with the same period in 2011 due to exchange rate effects, Talanx said.
Adjusted for exchange rate effects, the company's premium income rose by 7%.
Premiums in Mexico grew 81% to 46mn euros, of which 41mn euros was inorganic growth achieved by Metropolitana.
As such, Talanx's gross written premiums in Latin America grew 8.3% in the first nine months of the year compared to the same year-ago period to 1.39bn euros, with primary insurance rising 12% and reinsurance premiums expanding by 4.2%.
The region represented 7% of Talanx's gross written premiums as of end-September, unchanged compared to the same time 2011.
OUTLOOK FOR 2013
Talanx earned 549mn euros in January-September, equal to a 12.2% ROE and up 68% compared to the same period 2011, as gross written premiums grew 11% to 19.8bn euros, investment income expanded 20% and underwriting losses were slashed by 16%.
Talanx said it is targeting gross premium volume of around 26bn euros and net profits to come in slightly higher than 600mn euros for the whole year.
After announcing plans for an initial public offering, canceling those plans due to lack of interest and reinstating them in the space of two weeks, last month Talanx raised 517mn euros in an IPO.
Despite the inflow of equity capital from its IPO, Talanx is anticipating an ROE of around 10% for 2012, "provided there are no upheavals on capital markets or extraordinary loss events."
"According to the information available to date, Superstorm Sandy will remain within the bounds of the envisaged major loss budget," the report reads.
For 2013, Talanx is targeting net income of at least 650mn euros.
The group also said it intends to reinforce its position as a global player in 2013, with Latin America being one of its target regions outside Europe.
To read Talanx's full interim report, go to this link
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