RDX : 送上来的钱撑着不用 小心跟先贤一个下场
FRANKFURT -- Hannover Re AG, one of the world's five largest reinsurers, Tuesday said it won't tap the German government's rescue package, although it warned that it wouldn't be able to meet its full-year profit target.
"We don't plan to use the rescue package provided by the German government, because unlike banks, we don't have a liquidity or refinancing problem," a Hannover Re spokeswoman said. The profit warning issued earlier in the day is "related to write-downs and the dramatic decline in stock prices," she added.
Hannover Re said it won't be able to maintain its full-year target of a return on equity above 15%, due to the stock-price slump combined with higher-than-budgeted natural disasters.
"Hannover Re had made its profit forecast subject to the reservations that capital markets would recover and the burden of catastrophe losses would not significantly exceed the expected level of 10% of net premium in non-life reinsurance. Neither of these conditions has been met in the second half of the year," the company said.
Hannover Re said it expects to report a net loss of around €140 million ($186.6 million) for the first nine months, as losses on equities aren't tax-deductible in Germany. However, nine-month operating profit will still be a positive figure, it said. Still, "this means that the profit target of an [after-tax] return on equity in excess of 15% is no longer attainable," it said.
"The crisis on international capital markets has intensified still further compared to the first half of 2008, inevitably leaving its mark on Hannover Re's investment income," it said. "Despite the financial market crisis write-downs on fixed-income securities -- which constitute by far the bulk of the asset portfolio -- remained relatively modest; nevertheless, Hannover Re has been impacted by the dramatic slump in equity prices." As of Sept. 30, 8% of Hannover Re's portfolio was invested in equities.
The company said nine-month net investment income will be "sharply lower," as Hannover Re booked write-downs and unrealized losses of around €466 million, roughly €360 million of which was taken on equities. That contrasts with year-earlier write-downs and unrealized losses of €16.5 million, of which €8.4 million was related to equities.
The return on investment for the first nine months stood at 2%. It also said it will need to take further charges in the fourth quarter, although it reduced its equity exposure significantly in October.
The write-downs were exacerbated by higher-than-budgeted expenses for major claims in the period, which will cost around 14% of net non-life reinsurance premium income versus 10% the company had factored in. Hurricanes Gustav and Ike taken together will cost Hannover Re around €250 million. Hannover Re will present the full set of third-quarter and nine-month earnings Nov. 5.
Munich Re AG reiterated Tuesday that it sees a need for write-downs on its equity holdings in the third quarter, but declined to comment further ahead of third-quarter figures Nov. 7. German insurer Allianz SE declined to comment Tuesday, noting that its third-quarter earnings will be released Nov. 10.
On a positive note, Hannover Re, which competes with Swiss Re Co. and Munich Re for primary insurers aiming to spread risks on their books, said it expects the capital depletion triggered by the financial crisis to increase demand for reinsurance and to lead to "substantially higher rates in a number of lines" in the 2009 contract renewals.
Swiss Re, meanwhile, declined to comment after the Hannover Re profit warning, saying it would publish its third-quarter results Nov. 4.
Swiss Re, at an investor day in September, said that as of Aug. 31, it had registered mark-to-market losses of another 245 million Swiss francs ($212.9 million) on its structured credit default swaps, which have so far cost it more than $2 billion. It also said that it had bought hedges for most of its bond portfolio to insulate itself against potential losses.
Shares of Hannover Re were suspended for about an hour following the profit warning. By midmorning in Frankfurt, after trading had resumed, the shares were down 6.4%, underperforming the wider market, which was up 1.5%.
No comments:
Post a Comment