Only a few building owners have insured their houses against natural hazards before the major storms in western Germany – this is why a large number of them do not receive any money from the insurance companies for damage caused by the flood. The Hanover-based insurance group Talanx is currently also concerned with this topic. The flood disaster has re-fueled the debate about compulsory elementary insurance. The German insurers do not support them. From the point of view of Talanx CFO Jan Wicke, however, it could make sense to make natural hazards an integral part of building insurance in the future, which would have to be actively voted out. That could lead to more clarity in the counseling situation, he explains. The reinsurer Munich Re is also in favor of such an opt-out solution.
For the third quarter, Talanx expects the flood to have a negative impact on earnings of 150 million euros, including around 50 million euros in primary insurance with end customers and 100 million euros in reinsurance. Nevertheless, the group has raised its profit target for the full year 2021: The insurance company is now expecting a profit of 900 to 950 million euros. So far there has been talk of 800 to 900 million euros.
“We can raise our outlook despite the devastating flood disaster,” said CFO Wicke. Because in the first six months the company earned 546 million euros, significantly more than the 325 million euros in the previous year. The premium income also increased, namely by nine percent to 24 billion euros.
The increase in profits is also due to the fact that there was less damage as a result of the corona pandemic in 2021. In 2020, the company paid large sums for event cancellations and the closure of businesses. The reinsurer of the group, Hannover Re, experienced high losses: The Covid-19 infections caused an increase in mortality. This will still apply in 2020, but the total burden due to the coronavirus will decrease: In the first half of 2020, the pandemic cost the group 278 million euros. This year, however, it was only 72 million euros.