Hannover Re has increased its gross written premium (GWP) by 11.2% to €11.4 billion ($15.73 billion) in 2010 and expects premium growth of up to 3% this year.

Net income rose by 2% to €748.9 million ($1 billion), and CEO Ulrich Wallin says Hannover Re expects to generate a profit of around €650 million ($896 million) this year if major losses don’t exceed the €530 million ($482 million) it has anticipated.

The 2010 result was boosted by a €112 million ($154 million) gain from a favourable court ruling on the taxation of foreign-sourced income.

Mr Wallin says a “heavy incidence of major losses” in 2010 was more than offset by lower basic losses and healthy investment income, which rose 12% to €1.2 billion ($1.6 billion).

GWP volume rose 6.8% at constant exchange rates. GWP from Australia rose 8.5% to €415.6 million ($573 million).

Hannover Re’s net premium earned rose 7.9% to €10 billion ($13.8 million).

Mr Wallin says non-life reinsurance delivered a very good profit despite the major losses, with GWP up 10.3% to €6.3 billion ($8.7 billion).

“Even though the competitive pressure in non-life reinsurance intensified, we are still satisfied with the development of our operational business.

“Prices and conditions were for the most part preserved on a stable level thanks to the largely disciplined underwriting practice among reinsurers.”

Net expenditure on major claims was €661.9 million ($913.9 million), up by 176% and against an expected level of €500 million ($690 million). Mr Wallin says three severe earthquakes dominated the year.

The largest single event was the quake in Chile, which cost the company €181.9 million ($251 million). The first Christchurch earthquake cost €113.8 million ($157 million).

There were also costs from winter storms in Europe and the Deepwater Horizon oil rig explosion in the Gulf of Mexico.

He says despite the major losses the combined ratio increased only modestly from 96.6% to 98.2%.

GWP in life and health reinsurance increased by 12.4% to €5.1 billion ($7 billion), with net premium earned up by 14.1% to €4.7 billion ($6 billion) on growth in the UK and particularly vigorous expansion in China.

Mr Wallin says this year the company is looking to generate growth of 10% to 12% in net premium in life and health reinsurance.