Catastrophe losses hit the profits of Hannover Re and Munich Re for the first nine months of the year, although they have reported that premiums are growing and rates are hardening.

Munich Re saw profit slammed by catastrophes and financial losses, reporting a third-quarter profit of €290 million ($372 million) compared with €761 million ($1 billion) for the corresponding period last year and for the nine months a profit of €80 million ($107 million) compared with €1.96 billion ($2.6 billion) last year.

The Japan earthquake and tsunami will cost it around €1.5 billion ($2 billion) net before tax, while Hurricane Irene will cost around €195 million ($260 million) and the Canterbury earthquakes €1.1 billion ($1.5 billion).

The Queensland floods will cost Munich Re around €200 million ($267 million). The group wrote down €933 million ($1.2 billion) on Greek bond holdings.

Gross written premium (GWP) for the three months rose 16% to €1.5 billion ($2 billion) and the combined ratio was 97.6. The group generally aims for a ratio in property/casualty reinsurance of less than 97% but anticipates this will blow out to around 113% for the full year.

CFO Jörg Schneider says although the result was affected by capital market and currency turbulence, “our financial position has once again proved comparatively resilient. The low combined ratio in reinsurance in the third quarter and the satisfactory underwriting results in insurance and reinsurance are indicators that our core business is doing well.”

The group expects an increase in GWP of around 7.5% for the full year.

Hannover Re expects to grow net reinsurance premiums by 7-8% for the year due to market opportunities in the international reinsurance business.

Reinsurance GWP grew by 6% to €9.06 billion ($12 billion) for the third quarter. Operating profit fell 43% to €487.8 million ($651 million) due to disaster losses and lower profitability from health and life reinsurance.

GWP from non-life reinsurance grew by 8.2% to €5.2 billion ($6.9 billion) and the group had a combined operating ratio of 105%.

Hannover Re says the market will continue to harden.

“This tendency was confirmed not only by the industry gatherings in Monte Carlo, Baden-Baden and the US, but also by the most recent round of renewals in North America,” it said in a statement.

The premium from life and health reinsurance grew by 3% to €3.8 billion ($5 billion). The group says prospects for the business remain favourable and it expects net premium growth of more than 5% from it this financial year.

Also see ANALYSIS