HDI Group’s parent company Talanx has raised its earnings forecast for this year, but expects profits will flatline next year as markets remain tough.

The German insurance company says net income increased 30% to €635 million ($877 million) for the nine-months to September 30, and the group expects the full year to reach “at least” €750 million ($1.04 billion).

“Although the market environment is still challenging, the first nine months of the year have gone well,” CEO Herbert Haas said. “We have posted surprisingly few claims and have made good progress with internationalisation in industrial lines and growth in retail international.”

Gross written premium (GWP) fell 2.5% to €23.7 billion ($32.7 billion) but was largely stable when adjusted for currency effects. The combined operating ratio improved slightly to 96.6% due to a more favourable claims situation than in the corresponding period last year.

In the industrial lines division, premium grew in branches in the UK, Denmark and Switzerland, plus subsidiaries in Brazil and the US. The combined operating ratio for the division improved 2.2 percentage points to 98%.

Third-quarter group results show GWP fell 2.7% to €7.3 billion ($10.1 billion), while the combined operating ratio improved to 96.4% from 98%, due to a low volume of large losses.

Talanx is targeting net income of at least €750 million ($1.04 billion) next year, despite declining interest rates. GWP is expected to rise 1% on constant exchange rates, while the net return on investment should be at least 3%, the company says.