(new: further dividend development, development of motor insurance, updated share price reaction)

HANNOVER (dpa-AFX) - Following its record profit last year, the insurance group Talanx (HDI) is raising the bar for 2025. The company announced in Hanover on Thursday that its net profit is set to rise to more than 1.9 billion euros in the coming year. Previously, CEO Torsten Leue had set a target of more than 1.6 billion. He wants to exceed this mark by 2024 and generate a profit of more than 1.7 billion. Shareholders can look forward to a higher dividend for 2023 and 2024.

The news was only initially well received on the stock market. The Talanx share price initially rose by just under two percent in the morning, but then fell and was down by just under two percent at 70.25 euros at lunchtime. This made the share one of the biggest losers in the MDax, the index of medium-sized stocks. Since the turn of the year, the share has gained around nine percent. Looking at the past five years, however, its value has more than doubled.

Last year, Talanx earned almost 1.6 billion euros, more than ever before, as the Group had already announced in February. Since 2023, large insurers have been calculating their business figures in accordance with the new IFRS 17 and IFRS 9 rules. The results are not easily comparable with the old figures.

In the previous year, Talanx's profit under the new rules amounted to only 706 million euros, which was also due to one-off effects from the changeover. Under the old accounting standards, the insurer had reported a profit of almost 1.2 billion euros for 2022. The Executive Board intends to announce new business targets for the years 2025 to 2027 at a capital market day in December.

In the past year, Talanx benefited from premium increases, higher interest rates and the fact that major claims remained just within the estimated budget of 2.2 billion euros. By raising premiums, insurers have recently been trying to compensate for the increase in claims due to inflation.

In business with private and corporate customers in Germany with the main brand HDI, Talanx did not succeed in doing so. The division's turnover in the property and casualty business rose from 1.6 to 1.8 billion euros. However, the division had to spend more money on major claims, particularly due to the destruction caused by storm "Lambert".

In addition, the increased prices for spare parts and repairs had an expensive impact on motor vehicle insurance - as is generally the case in the industry. As a result, the insurance turnover in the German motor vehicle business was not sufficient to cover the expenses for claims, administration and sales. According to Management Board member Jens Warkentin, Talanx was in line with the general industry level. According to earlier figures from the German industry association GDV, motor insurers spent EUR 1.10 for every euro they earned last year.

Group-wide, Talanx's insurance turnover grew by nine percent to 43.2 billion euros in 2023 on a comparable basis. Industrial insurance grew, as did private and corporate insurance in Germany and abroad and Hannover Re, the world's third-largest reinsurer, in which Talanx holds a good half of the shares.

On balance, Hannover Re contributed 54 percent to Talanx's profit. Primary insurance accounted for 46 percent. "It is good for us that we are well diversified and that both areas account for around half", said CEO Leue in a video conference with journalists. There is no fixed target for when primary insurance will exceed the 50 percent mark.

Talanx shareholders are now to receive a higher dividend for 2023. The payout is set to rise by 35 cents to 2.35 euros per share, which is slightly more than analysts are expecting on average. For 2024, the Group intends to distribute EUR 2.50 per share, which it had originally planned for 2025. The biggest beneficiary is the Haftpflichtverband der Deutschen Industrie (HDI), a mutual insurance association. It owns just under 77 percent of Talanx shares.

The Group recently expanded its presence in Latin America with a takeover. It took over Libery Mutual's business with private customers and small and medium-sized companies in Brazil, Chile, Colombia and Ecuador. According to Talanx, this makes it the second-largest property and casualty insurer in terms of premium income. The final part of the takeover was completed at the beginning of March./stw/mne/stk