Hannover Re sees unchanged profit in 2016 as premiums pressured

FRANKFURT (Reuters) - Hannover Re forecast unchanged net profit of 950 million euros next year, saying on Wednesday it expected stable to slightly lower gross premiums when adjusted for currency swings.

"Property insurance is more likely to see declining rather than stabile premiums," said Chief Financial Officer Roland Vogel. "Growth this year came mainly from a few large-volume contracts rather than bread and butter reinsurance business."

Vogel said the company aimed to do more such contracts next year but these were not included in its targets for premiums, which rose 20 percent in the first nine months of this year.

Reinsurers such as Hannover Re, Munich Re and Swiss Re act as a financial backstop for insurance companies, helping them pay for large damage claims from hurricanes or earthquakes in exchange for part of the premiums.

"It is positive that the newly implemented FY 2016 target is at the same level as the strong 2015, despite price pressure in non-life reinsurance and low interest rates," DZ Bank analyst Thorsten Wenzel said.

Hannover Re said it was confident of achieving its net profit goal for this year, also set at 950 million euros, after beating expectations in the third quarter with net profit of 254 million euros.

Analysts already expected net profit of more 1 billion euros in 2015, according to a Reuters poll.

"It's certainly possible that we'll exceed 950 million if there are no big surprises in the final quarter but it doesn't make sense for us to raise the target now," Vogel said.

Good results so far increased the chances the company would pay a dividend in the order of the 4.25 euros it paid for 2014, he said. Analysts already expected a dividend of 4.52 euros on average for this year, the Reuters poll showed.

The company expected to see damage claims under Director's and Officer's (D&O) insurance policies from the VW emissions scandal and the crash of a Russian Airbus jet in Egypt on Saturday, Vogel said, but neither was likely to count as a major loss for Hannover Re, defined as a claim of more than 10 million euros.

(Reporting by Jonathan Gould; editing by David Clarke)