HDI Global parent Talanx says the group is on track to reach the upper end of its earnings forecast range, despite European flooding in the third-quarter, and it expects profit next year to rise to more than €1 billion ($1.6 billion).

Talanx has also set longer-term ambitions for return on equity from the primary insurance divisions, with industrial lines to be bolstered by a transaction giving it full ownership of HDI Global Specialty.

The Hannover-based group says nine-month net profit rose 39.2% to €723 million ($1.1 billion) despite earnings falling 9% to €177 million ($275 million) in the September quarter when it was affected by the flooding in Germany.

Nine-month gross written premium rose 10.2% to €35.2 billion ($54.7 million) and the combined operating ratio improved from 100.7 to 97.6%.

Pandemic effects have also declined gradually over the year, with the exception of the Life/Health reinsurance business.

“We can achieve our targets for [this year] despite the substantial rise in large losses from natural disasters,” Board of Management Chairman Torsten Leue said

Talanx expects a full-year result at the upper end of its €900-950 million ($1.4-1.5 billion) forecast range, while an initial outlook for next year puts net profit at €1.05–1.15 billion ($1.63-1.79 billion).

Looking further ahead, the industrial lines, retail Germany and retail international divisions are all aiming for a return on equity of more than 10% by 2025. The group is also seeking to achieve carbon neutrality for both its underwriting and investment portfolios by 2050.

HDI Global earlier this month said it had taken full ownership of the HDI Global Specialty venture, acquiring a 49.8% stake held by Hannover Re. The deal will be effective December 31.

“Going forward, as the sole shareholder of HDI Global Specialty we will be better able to act on our opportunities in this promising market than was previously the case,” HDI Global CEO Edgar Puls said.

“Amongst other things, we will be very flexible in our ability to decide on potential M&A projects and take appropriate action.”