Munich, December 6 – A quarter more profits, a quarter more dividends: the insurance group Talanx aims to become significantly more profitable over the next three years. CEO Torsten Leue wants to increase net profit to 1.6 billion euros by 2025, as he announced during a trading day in Hanover on Tuesday.
For the current year, Talanx has already reached €1.10-1.15 billion (previous year: €1.01) billion, with changes to the IFRS accounting standard from 2023 adding around €100 million euros. Leue wants to increase return on equity to ten percent or more across the group – this should be the case by 2022.
Shareholders should also benefit: Talanx intends to pay 2.00 euros per share for the year that is ending, a quarter more than a year earlier, and the group is aiming for 2.50 euros by 2025 – if profits and cash allow it. Talanx previously targeted a payout ratio of 35-45% of profits, but recently exceeded the target on average.
The new targets were well received on the stock market: Talanx shares jumped 3% to 44.10 euros.
“From stabilization to acceleration” is the motto of Capital Markets Day. This is especially true for industrial insurance, which was still in the red four years ago and is also expected to achieve double-digit returns by 2025. The division’s gross premiums are expected to reach more than ten (2022: 8, 7) billion euros. Division chief Edgar Puls hinted at the prospect of further rate hikes given inflation.
Therefore, German private customers also have to pay more, for example in car insurance. “We don’t see any significant fluctuations, so it’s accepted by customers,” said board member designate Jens Warkentin. The domestic private client business is expected to generate approximately 50% more operating profit in 2025 than today.
By strengthening primary insurance, Leue wants to break the dominance of the listed reinsurance subsidiary Hannover Re, in which Talanx holds a good half. Currently it still generates 60% of the profits, in 2018 it was more than two thirds. “Keep up the good work,” said the CEO of Hannover Re. Going forward, however, primary insurance and reinsurance profits should balance each other out – Leue wouldn’t say exactly when.
Talanx wants a quarter more profit and dividends
Symbolic photo: Image by Patrick Sommer on Pixabay
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