Thus, GWP increased to EUR 34.9 billion vs. EUR 33.1 bilion, "Thanks to operating improvements in both Retail Germany and International and in Reinsurance, comfortably offsetting the decline in Industrial Lines."
At the same time, the combined ratio significantly improved at 98.2% (100.4%), the Group net income was up by 5% from the prior year, to EUR 703 million (EUR 671 million), while EBIT increased by 13% y-o-y to EUR 2.0 billion.
"In comparison to the previous year, which was marred by severe natural catastrophes, the net large loss burden shrank significantly in 2018. Nonetheless, at EUR 1.2 billion (vs. EUR 1.6 billion), it still went over the anticipated large loss budget of EUR 1.1 billion."
Of this figure, primary insurance accounted for a total of EUR 394 million (vs. EUR 492 million) and Reinsurance for EUR 850 million (EUR 1.12 billion). The German insurer mentioned that the largest loss events in 2018 were California's forest fires in November and December, which collectively incurred loss volumes of almost EUR 200 million. This is followed by Typhoon "Jebi" in Japan and losses resulting from the heavy rainfall in Colombia.
TALANX representatives confirmed the outlook for the year and medium-term targets mentioning aggregate FY2019 net income of EUR 900 million. "Growth in GWP is set to be around 4.0% on a constant exchange-rate basis. IFRS net return on investment should reach around 2.7% which is ambitious given the increasingly intense low interest rate environment."