HDI Global, the corporate and specialty insurance arm of Germany's Talanx Group, reported growth in operating profit and net income in its first-quarter results, citing underwriting discipline, a favorable large-loss experience and stronger investment income.
"Overall, our first-quarter performance reflects a profitable start to the year in a demanding market environment," said Edgar Puls, chief executive of HDI Global.
Top-line development was broadly flat on a currency-adjusted basis, while the division's contribution to Talanx Group earnings rose during the period, the insurer said.
Insurance revenue came in at €2.5 billion, compared with €2.6 billion a year earlier. The insurance service result held at €224 million, against €229 million in the prior-year quarter.
Large loss payments totaled €58 million, down from €105 million, falling €92 million short of the pro rata budget that had been fully recognized for the period.
"The underutilization of our large loss budget provides an additional buffer as we move into the upcoming natural catastrophe season," Puls said.
The combined ratio at HDI Global edged to 91.0% from 91.1%, keeping the carrier on course for its full-year target of below 92%.
The net insurance financial and investment result before currency effects climbed to €99 million from €49 million, lifted by one-off measurement effects, higher recurring interest income and a larger investment base, the insurer said.
Return on equity stood at 17.9%, compared with 18.4% a year earlier. Operating profit advanced 6% to €207 million from €195 million, while the division's contribution to group net income rose 8% to €152 million from €141 million.
The performance at HDI Global fed into a stronger showing at the group level, where Talanx's diversified insurance portfolio amplified the gains.
Read more: Talanx Group Q1 profit increases 28%
Talanx Group posted a 28% rise in group net income to €774 million, with primary insurance written largely under the HDI brand contributing 53% of the total, the parent said. The group's combined ratio improved to 88.7% from 92.8%, while return on equity rose to 22.3% from 20.1%.
Talanx's 22.3% return on equity and sub-90% combined ratio compare favorably with many European peers, with the figures pointing to the group competing effectively on profitability while retaining growth options in international retail and specialty insurance lines.
Puls said the top-line trend reflected a "disciplined and selective underwriting approach" and was influenced by currency movements, particularly the US dollar.
He pointed to the insurance service result, investment income and the large-loss experience as factors supporting profitability.
"We are fully on track to meet our full-year result guidance and enter the remainder of the year with confidence," Puls said, also citing recent board changes and the Xcelerate29 strategy.
"We constantly achieve this by combining our global reach, a forward-thinking mindset, and strong technical excellence at the core of our business," he said, thanking employees, clients and broker partners for their continued engagement with the group.
