OREANDA-NEWS. The Industrial Lines Division at the Talanx Group is driving forward its underwriting policy strictly focused on profit in domestic business and targeting further profitable growth in foreign business. “For the year 2019, we are anticipating more than three billion euros gross premium in the profitable foreign business. This will then be around two thirds of our entire industrial insurance business,” says Herbert K. Haas, Chairman of the Board of Management of Talanx AG, at the Capital Markets Day in Hannover. “At the same time, we expect a significant improvement in earnings for Germany,” adds the Talanx CEO.

The division expects the “Balanced Book” package of measures to once again achieve a combined ratio of less than 100 percent even in Property insurance as early as 2016. “Balanced Book” is focused on increasing the diversification of the portfolio in relation to risks and capacities. The medium-term target in the division and Primary Insurance overall remains unchanged at a combined ratio of around 96 percent. “The signals from the first contract renewals in Property Insurance are promising. We have succeeded in significantly improving the ratio of premiums to risks in the contract extensions. This also makes us optimistic for the renewal round 2015/2016,” says Dr Christian Hinsch, deputy Chairman of the Board of Management of Talanx AG and Chairman of the Management Board of HDI-Gerling Industrie Versicherung AG.

HDI-Gerling Industrie Versicherung AG manages the division and continues to perceive substantial potential for profitable growth in international business. By 2019, gross written premium generated from foreign business in industrial insurance is projected to increase by more than five percent on average each year. Firstly, the division is committed to emerging markets with the aim of strengthening premium growth. Secondly, Christian Hinsch explains the plan to increasingly acquire small and mid-size companies as customers in the European market. This strategy is to be supported by a number of measures including the foundation of new locations.

At the same time, the number of international insurance programmes which HDI-Gerling is supporting as the sole or lead insurer is set to increase further. From 2011 to 2014, this number grew by more than half from around 2200 to more than 3500. “This reveals the significant growth over recent years in our customers’ requirement for cross-border insurance solutions. That rise in demand results in an increasing internationalisation of our business,” explains Christian Hinsch.

As the Talanx Group makes preparations for Solvency II, it is on course for the planned introduction of its internal model for 1 January 2016. For the first time, the Group is showing that an additional capital buffer amounting to ten percent of the regulatory equity capital is anchored in its calculations for Solvency II capitalisation, in order to compensate for model and other risks. The latest confirmation by Standard & Poor’s positions Talanx unchanged as stable in the target range of an “AA” capitalisation. For the first time, Standard & Poor’s also took account of a so-called “M Factor”. This is a seal of approval for the quality of internal risks management associated with an additional capital benefit.