Talanx AG, Germany’s third-biggest insurer, said fourth-quarter profit rose 17 percent helped by investment gains as it sought to restructure its German retail division.
Net income increased to 239 million euros ($259 million) from 203 million euros a year earlier, the Hanover, Germany- based insurer said in a statement. That compared with a 222 million-euro estimate of six analysts surveyed by Bloomberg.
The company, led by Chief Executive Officer Herbert Haas, 60, confirmed a full-year profit target of at least 700 million euros after last year’s net income of 769 million euros beat a target set by the company for at least 700 million euros. Talanx also said it “implemented measures to strengthen the balance sheet” at its German retail unit led by Jan Martin Wicke.
This year “will be one of the most challenging years in a long time, with falling capital market returns and soft markets in industrial insurance and reinsurance,” CEO Haas said in the statement. “Another challenge will be the long-term restructuring of the retail Germany segment.”
Measures to strengthen capital at the German retail unit such as adjustments on the value of German life insurance portfolios included in fourth-quarter earnings of 290 million euros “were largely financed” by gains of 214 million euros from the sale of Talanx’s remaining shares in Zurich-based Swiss Life Holding AG, the company said.
The insurer plans to pay a dividend of 1.25 euros a share for 2014, compared with 1.20 euros a share paid out for 2013.
Hannover Re, the world’s third-biggest reinsurer and 50.2 percent owned by Talanx, said on March 10 it plans to pay a special dividend after fourth-quarter profit rose more than analysts estimated, helped by low catastrophe claims.
Talanx shares gained 23 percent this year valuing the company at 7.9 billion euros. The Bloomberg Europe 500 Insurance Index climbed 21 percent in the period.