Hannover Re is on course to hit its full-year profit target of €950 million ($1.48 billion) after posting a first-quarter profit of €271.2 million ($421 million), up 12.7%.

CEO Ulrich Wallin says that when a “positive special effect” recorded in the corresponding quarter last year is factored out, “we have achieved a pleasing increase in our group net income”.

“This was driven by a strong underwriting profit in property and casualty reinsurance, as well as good results in life and health reinsurance and on the investment side.”

The combined operating ratio improved to 94.7%, compared with 95.7% in the first quarter of last year.

Gross written premium was in line with expectations at €4.3 billion ($6.68 billion), down 3.1%.

Investment income came in significantly lower at €268.5 million ($172.86 million), compared with €312.2 million ($200.9 million). This is attributed to a special effect recognised in the investment result of the first quarter last year from the life and health reinsurance side.

Hannover Re says the investment climate remains challenging amid low interest rates.