Hannover Re, the world’s third- biggest reinsurer, posted a 48 percent increase in fourth- quarter profit, beating analysts’ estimates.

Net income rose to €265 million ($367 million) from €179 million [$248 million] a year ago, the Hanover, Germany-based company said in a statement today. That exceeded the €216 million [$299 million] average estimate of 10 analysts surveyed by Bloomberg. The reinsurer kept its dividend unchanged at €3 [$4.157] per share.

The reinsurer, led by Chief Executive Officer Ulrich Wallin, reiterated its 2014 profit target of €850 million [$1.178 billion] on Feb. 6, even as contract prices decline. Rates charged by reinsurers, which help primary insurers shoulder risks, are under pressure because of lower-than-average disaster losses and as the supply of capital is boosted by pension fund money.

The reinsurance industry had about $322 billion in capital at the end of 2013, almost a record, according to Guy Carpenter, the reinsurance broker of Marsh & McLennan Cos.

Because of that supply, prices for property-catastrophe policies declined 11 percent in January and also fell for most other types of coverage, according to the broker. Reinsurance rates declined in seven of the last 10 years, according to the Guy Carpenter World Property Catastrophe Rate on Line Index.

Last year, claims against insurers and reinsurers from natural catastrophes dropped 52 percent to about $31 billion amid a quieter hurricane season, according to Munich Re, the world’s biggest reinsurer.

Tax Gain

Hannover Re had gain of about €90 million ($125 million] last year, resulting from the release of provisions for deferred taxes, the company said.

Munich Re said on Feb. 4 it plans to boost its dividend after fourth-quarter profit beat estimates on lower catastrophe- related costs. Swiss Re Ltd., the second-biggest reinsurer, also raised its proposed payout for 2013 after fourth-quarter profit exceeded analysts’ estimates.

Hannover Re shares fell 2.7 percent this year, compared with a 0.7 percent gain for the Bloomberg Europe 500 Insurance Index. German insurer Talanx AG owns 50.2 percent of the reinsurer.