Talanx (TLX) Q2 2024 earnings summary

Executive summary

• Revenue increased by 13.2% year-over-year to €23.6bn, with net income up 32% to €1.09bn for the first six months of 2024, surpassing €1bn for the first time in a half-year period.

• Return on equity reached 20.3%, up 1.8 percentage points year-over-year, exceeding the strategic target of ~15%.

• Growth was driven by organic expansion, the first-time consolidation of Liberty's LATAM business, and strong performance in Retail International and Industrial Lines.

• Primary Insurance profit contribution moved closer to 50% of group net income, reflecting strategic progress.

• Operating profit (EBIT) grew 28.5% to €2.52bn, driven by higher profitability in key segments.

Financial highlights

• Insurance revenue increased by 13.2% year-over-year to €23.6bn; net income grew by 32% to €1.09bn; EBIT rose 28.5% to €2.52bn.

• Combined ratio improved to 91.2% from 93.7%, down 2.5 percentage points year-over-year.

• EPS increased from €3.26 to €4.22, up 29.3%.

• Solvency II ratio stood at 218% after Q2, well above the 150-200% target range, despite a €600m dividend payment.

• Net investment income for own risk rose 26.6% to €2.19bn; annualized return on investments for own risk increased to 3.2%.

Outlook and guidance

• Confident in delivering net income well above €1.7bn and ROE above 15% for the full year, with guidance to be reviewed after Q3.

• All targets contingent on large losses not exceeding budget, stable capital markets, and no major currency fluctuations.

• Dividend policy and new midterm targets to be presented at Capital Markets Day in December; dividend per share proposed at €2.50 for 2024.

• Retail International expects double-digit insurance revenue growth and ROE >10% due to Liberty acquisitions.

• Property/Casualty Reinsurance combined ratio expected to remain below 89% for 2024.