Talanx says reinsurance & retro to cover roughly half of July flood losses

Share

Talanx, the German insurance and reinsurance group and parent of major player Hannover Re, has said that it anticipates recovering roughly half of its claims burden from the recent severe floods that affected Europe from reinsurance and retrocession partners.

Flooding in Germany, photo from Christoph Reichwein - AFP

Flooding in Germany, photo from Christoph Reichwein – AFP

Talanx has a significant footprint in the German market, which was the country worst affected by the devastating flooding, with a range of insurance brands providing exposure to primary property risks, while Hannover Re provides reinsurance exposure to the floods as well.

Previously, Hannover Re had said that it is anticipating a net loss of up to EUR 250 million from the recent severe flooding across Europe, in particular from the impacts in Germany.

Parent Talanx has revealed that it expects large losses to be elevated in the second-half of 2021 because of the flooding event.

The company said that across the group, it expects the flooding in Europe from July will drive a gross loss of around EUR 600 million.

However, the company said that the net impact is likely to be a little more than EUR 300 million, which suggests the company is anticipating somewhere north of EUR 250 million of reinsurance and retrocessional cover to help in paying claims.

Slightly more than two-thirds of the figures are attributed to Talanx’s reinsurance division, so Hannover Re.

Which ties in with Hannover Re’s forecast EUR 250 million net loss from the flooding, but also suggests that Hannover Re may benefit from some retrocessional protection, as its gross loss would be expected to be higher, perhaps as much as EUR 400 million, or slightly higher, based on Talanx’s report.

Talanx warned that the hit to group net income could be as much as EUR 150 million, a significant proportion of which likely comes from Hannover Re.

Despite the floods and demonstrating how profitable insurance and reinsurance is for Talanx, the company has raised its forecast for net income for the full-year anyway.

We’ve been tracking some of the companies with larger reinsurance or retrocession recoveries from the flooding, with the most recent being yesterday’s on Belgian insurer Ageas’ expectation of a reinsurance recovery that could be in the region of €350 million.

Last week we reported that Allianz expects around a €900 million gross flood loss, but to recover around €500 million of this from its excess-of-loss reinsurance.

Deutsche Rück said that its retrocession program will be triggered and protect its balance-sheet against some of the financial impacts of the recent severe flooding in Germany.

We also reported that, European insurer Generali also expects to recover from its reinsurance partners for the recent storm and flood losses in Europe.

In addition, insurer AXA said that it estimates that losses from July’s floods that hit Germany, Belgium, and other parts of Western and Central Europe, will be around EUR 400 million, which it reported before tax and net of expected reinsurance recoveries.

Hannover Re said it is anticipating a net loss of up to EUR 250 million from the recent severe flooding across Europe and in particular Germany.

While Swiss Re said it expects mid-triple digit millions of losses from the flooding and South African riots.

Finally, reinsurance giant Munich Re said it expects mid-three- digit million euro losses from the July flooding in Germany and across Central Europe.

———————————————————————
Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.

Read previous post:
Aon hires reinsurance broker Joe Jackson back from TigerRisk

Aon's Reinsurance Solutions division has announced the hiring of Joe Sergio Jackson to its US reinsurance broking team, hiring him...

Close