HDI Global 1H2017: 13.3% growth in the operating profit; cyber insurance know how expected to drive the future growth

22 August 2017 — Daniela GHETU
HDI Global SE recorded GWP of EUR 2.8 billion in 1H2017, 3.3% up y-o-y (2.6% in local currencies), particularly driven by the results recorded by the branches in France, Belgium and Japan.

Both the French and Belgian branches booked premium growth in the order of 10%. Premium income in Japan rose by more than 40%. The operational business written by the industrial insurer benefited not only from increases in premium but also from modest large loss expenditure and ongoing portfolio optimisation: the operating profit (EBIT) climbed by 13.3% during the reporting period to EUR 162 (143) million. Group net income additionally benefited from a lower tax ratio, rising by 23.4% to EUR 112 (91) million. HDI Global SE manages the Industrial Lines Division worldwide withinthe Talanx Group.

"HDI Global SE recorded a highly satisfactory business development in the first half of 2017. The steps taken towards portfolio optimisation are continuing to bear fruit and we were able to noticeably grow our premium income, especially on the international market", notes Dr Christian HINSCH, Deputy Chairman of the Board of Management of Talanx AG and Chief Executive Officer of HDI Global SE. "In the increasingly important area of cyber insurance we are seeing considerable interest on the part of industry and a rise in the number of policies taken out. In Germany it even became possible recently for companies with an annual turnover of EUR 5 to 50 million to buy such insurance protection online. Over the coming years we anticipate significant increases. This trend is already very evident from the inquiries that are coming in to us. In the first half of the year we have already received more inquiries than during the entire twelve months of 2016. A crucial factor here is that we have been quick to expand our range of products to multiple countries, including the Netherlands, United Kingdom, Austria and Switzerland. As a result, HDI is one of the few internationally operating insurers that can draw on its own know-how in the field of cyber insurance spanning several countries and, what is more, that is consistently expanding this international expertise." In keeping with its strategy, the industrial insurer's retention ratio was higher than in the previous year at 54.4 (52.7)%. This was due primarily to reduced cessions to external reinsurers in the liability and motor lines.

Ongoing portfolio optimisation measures helped to lower both the loss ratio and the expense ratio. The combined ratio improved to 97.2 (97.8)%. The underwriting result increased to EUR 32 (25) million. Net investment income surged by 25.7% in the first six months of 2017 to EUR 137 (109) million. EBIT rose by 13.3% to EUR 162 (143) million.

Premium income in the second quarter of 2017 nudged slightly higher to EUR 791 (785) million. The underwriting result amounted to EUR 13 (12) million. Net investment income reached EUR 68 (59) million. The combined ratio improved by 0.3%age points to 97.8 (98.1)%. EBIT climbed to EUR 82 (69) million. Group net income increased to EUR 53 (43) million.

In the first half of 2017 the industrial insurer generated roughly 61% of its gross premium volume in international markets and 39% in the domestic German market. By 2019 HDI Global SE is aiming to generate two-thirds of its gross premium volume in foreign markets. As part of its sustained drive towards greater internationalisation, the company is enhancing its customer intimacy by opening additional locations.

In the reporting period offices were opened in Brisbane, Australia, and Bern, Switzerland.


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