Hannover Re says it is “well on track” to achieve its calendar-year profit target of €850 million ($1.2 billion), despite soft market conditions.

First-half net income grew 4.9% to €444.4 million ($637.4 million), mostly on lower interest charges and a drop in the tax ratio.

Gross written premium (GWP) fell 2.2% to €7.1 billion ($10.2 billion) and the level of retained premium dropped to 87.7% from 90%. 

Net premium earned fell 5.7% to €5.8 billion ($8.3 billion).

Hannover Re says competition in the international non-life reinsurance market continues to “intensify sharply”.

Non-life reinsurance GWP fell
0.5% in the half to €4.1 billion ($5.9 billion). However, the company notes the “successful expansion of activities in southeast Asia”.

The combined operating ratio of 95%, compared with 94.4% in the corresponding period last year.

Profitability in life and health reinsurance showed a “pleasing improvement”, but GWP fell 4.6% to €3 billion ($4.3 billion).

The company acknowledges the “continued challenging state” of the business environment, particularly in non-life reinsurance.

But CEO Ulrich Wallin says Hannover is “optimally placed to face up to the soft market conditions”.