Hannover Re’s earnings grew 5.4% to €895.5 million ($1.39 billion) last year, driven by increased non-life premiums.

Gross premium volume in non-life reinsurance increased 1.3% to €7.8 billion ($12.1 billion), while the combined operating ratio improved to 94.9% from 95.8%.

Net expenditure from losses caused by Hailstorm Andreas, floods in Germany and other events totalled €577.6 million ($894 million) – an increase from €477.8 million ($739.5 million) in 2012 but lower than anticipated.

Life and health reinsurance earnings were hit by a “substantial strengthening” of reserves for the Australian disability business.

The division’s operating result fell 46.1% to €150.5 million ($232.9 million), while net income dropped by 26.2% to €164.2 million ($254.1 million), including some tax income associated with the Australian business losses.

Hannover Re forecasts stable to slightly high gross premium income – based on constant exchange rates – this year, with non-life volumes stable and life and health reinsurance expected to increase in the low to mid-single-digit percentage range.

“In view of the prolonged period of low interest rates and increasing competition, especially in non-life reinsurance, the general environment remains challenging,” CEO Ulrich Wallin said.

It has been reported that the company could face claims of about €30 million ($46.4 million) from the loss of Malaysia Airlines flight MH370, based on a preliminary assessment.