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Investing.com -- Talanx (ETR:TLXGn) on Wednesday reported a standout financial performance in 2024, surpassing its 2025 net income target a year early with a 25% increase to €1.98 billion.
The company also reinforced its financial resilience, increasing reserve buffers from €3.7 billion to over €4 billion.
Strong growth in Primary Insurance, improved underwriting performance, and the successful integration of acquisitions contributed to these results, positioning Talanx for continued expansion in 2025.
The company recorded an 11% increase in insurance revenue, reaching €48.1 billion, with a currency-adjusted growth rate of 13%. Return on equity stood at 17.9%, up from 16.6% in the previous year.
Primary Insurance was a key driver of growth, with its net income contribution rising by 28% to €1.17 billion, while the Reinsurance segment saw a 41% increase, reaching €1.11 billion.
The segment also posted strong performance across its divisions: Corporate & Specialty saw insurance revenue rise to €10 billion, Retail International reached €9.3 billion, and Retail Germany generated €3.6 billion.
Net income contributions from these divisions were €501 million, €449 million, and €163 million, respectively.
The group’s Property & Casualty combined ratio improved to 90.3% from 94.3% in the prior year, with Corporate & Specialty and Retail International seeing notable improvements.
Reinsurance also strengthened its profitability, with a net combined ratio declining to 86.6% from 94.0%. Large loss payments amounted to €2.2 billion, staying below budget despite several major loss events, including Hurricane "Milton" in the USA, floods in Eastern Europe and Brazil, and Hurricane "Helene."
Investment income rose to €2.9 billion, with an improved reinvestment yield of 2.9%, supported by a high-quality asset base where 93% of investments remain in investment-grade securities.
Talanx’s financial strength was further reinforced by a Solvency II ratio increase to 215%, well above the target range of 150-200%, and an S&P credit rating upgrade to AA-. This solid position supported a 15% dividend increase to €2.70 per share.
"In 2024, we not only exceeded our targets and further increased our resilience in a challenging market environment, but also drove forward our diversification: Our Group net income rose at more than twice the rate of our insurance revenue, while our Primary Insurance now contributes almost half of our Group net income. We also diversified our reinsurance protection in 2024 with our first catastrophe bond," said Torsten Leue, Talanx AG’s chief executive in a statement.
Morgan Stanley (NYSE:MS) in a note flagged highlighted the company’s strong underlying quality, particularly in the Corporate & Specialty and Retail International segments.
Corporate & Specialty reported an operating profit of €702 million, surpassing consensus expectations, while Retail International’s €836 million operating profit also exceeded forecasts.
The Liberty acquisition contributed over €80 million to net income, demonstrating its successful integration.
Talanx expects to sustain its positive trajectory in 2025, with a net income target of over € 2.1 billion and a projected return on equity of approximately 17%.
The long-term strategy remains focused on increasing net income by 30% and dividends by 50% by 2027.
"Our success in 2024 shows that our focused strategy with our trust-based, performance-driven culture is paying off. We have a decentralised organisation, are broadly diversified and hold cost leadership positions in 93 percent of our Group. This makes us optimistic for 2025 as well, and we are pursuing our goal of generating Group net income in excess of €2.1 billion with great confidence," added Leue.