Reinsurer Hannover Re has abandoned its profit forecast for the year but remains “cautiously optimistic” about next year’s prospects.  The group based the profit forecast on the expectation that capital markets would recover. It announced last week that the slump in investment values has resulted in writedowns and unrealised losses of €466 million ($924 million) for the first nine months of this year.

Net profit for the period is just €77 million ($152 million).  The group also fell well short in its expectation that catastrophe losses would not exceed 10% of net premiums in general reinsurance. They reached 14%.
Hurricanes Gustav and Ike cost the company €250 million ($512 million).

Hannover Re still expects a positive operating result in reinsurance for the first nine months of this year, when it releases its full 2008 financial results next month.