HANNOVER (dpa-AFX) - Insurance group Talanx is raising the bar a bit higher for 2023 following a record profit in the first half of the year. Group profit should exceed the targeted 1.4 billion euros in the current year, the insurer with the main brand HDI announced in Hanover on Monday. Chief Financial Officer Jan Wicke justified the fact that the Board of Management did not raise its forecast more significantly with the upcoming hurricane season in the U.S. and the Caribbean. In addition, the recent forest fires and floods, the burnt-out car freighter and write-downs on real estate and other financial assets are likely to cost the Group several million euros in the second half of the year.

The news was well received on the stock market. The Talanx share recently gained almost one percent in the morning, making it one of the stronger stocks in the MDax, the index of mid-sized stocks. Since the turn of the year, the share price has risen by almost a third.

Other companies in the sector have also recently expressed more optimism for the current year. For example, the head of the world's largest reinsurer Munich Re, Joachim Wenning, sees an increased probability that the Group will exceed its profit target this year. And at Munich-based insurer Allianz, CFO Giulio Terzariol believes it is "hard to imagine that operating profit will not reach the upper half of the target range."

One reason for this is higher revenues: Allianz, for example, turned the price screw on its property and casualty insurance customers to compensate for claims that are becoming more expensive with inflation. And reinsurers such as Munich Re and Hannover Re also recently pushed through higher premiums in business with primary insurers such as Allianz and Axa.

This development also plays into Talanx's hands - both in its reinsurance subsidiary Hannover Re, in which the Group holds a good half of the shares, and in industrial insurance under the HDI brand. The Board of Management therefore expressed confidence on Monday that the Group's insurance sales will also exceed the target of 42 billion euros this year.

This year, for the first time, major insurers are calculating their business figures in accordance with the new accounting standards IFRS 17 and IFRS 9, with insurance sales replacing the previous premium income as a key figure and designed to better show how much money is actually received by the insurer or reinsurer. The previous year's figures have been adjusted accordingly.

In the first half of the year, Talanx earned 827 million euros below the line, a good fifth more than a year earlier. However, the Board of Management does not want to extrapolate this result to the full year.

Wicke said in a conference call with journalists that it would not be possible to make any further statements until the hurricane season was over. In addition, the Board of Management still expects write-downs on real estate investments and private equity investments this year. He also said the group, like its competitor Munich Re, wants to sell more low-yield bonds from its investment portfolio at a loss in order to invest the money more profitably. For these reasons, the Board of Management had not raised its profit target more sharply.

Even without hurricanes, the first catastrophe losses are already emerging at Talanx in the third quarter. Both the floods in Slovenia and Austria as well as the forest fires in Greece and Hawaii and the hailstorms in South Tyrol are likely to make it onto the Group's major loss list via reinsurance, Wicke said. At Talanx, this means an insurance loss of at least 10 million euros each. This also applies to the major fire on the car carrier "Fremantle Highway" in the North Sea, Wicke explained.

In the second quarter, Talanx increased its net income by eleven percent year-on-year to 404 million euros. The Group benefited from the jump in profits at Hannover Re. Private and corporate insurance abroad also generated significantly higher profits after the Group turned around its business in Brazil.

Talanx continues to expand its foreign business in this segment through acquisitions and cooperations. In May, the Group reached an agreement with U.S. insurer Liberty Mutual to acquire the latter's private and corporate customer business in Brazil, Chile, Colombia and Ecuador for just under 1.4 billion euros. According to its own figures, this will make Talanx number one in property insurance in Chile and number two in Brazil./stw/men/nas