Talanx (ETR:TLX) management highlighted a record 2025, pointing to higher earnings, a stronger balance sheet and a sharply increased dividend, while cautioning that unusually low catastrophe losses helped results and should normalize in 2026.
Record earnings and a higher dividend
CEO Torsten Leue said 2025 was “another record year,” with earnings growth of about 25% to roughly EUR 2.48 billion and a return on equity “close to 20%.” The company announced a 33% dividend increase to EUR 3.60, describing the payout as supported by “high-quality earnings” and a strengthened balance sheet.
Large losses were unusually light in 2025
A major theme of the call was that 2025 benefited from a notably low level of large losses. The CFO said large loss consumption was 5.4% of net earned premiums versus a typical level of about 7%, calling the difference a windfall of about EUR 630 million compared with budgeted expectations. “We have been lucky,” the CFO said, adding that the group should remain humble and that it does not expect this to persist.
For 2026, Talanx is building in a return to normal conditions, including an increased large loss budget. Management said guidance assumes 7% large loss consumption and that the large loss budget has been raised to EUR 3.1 billion.
As an example of catastrophe risk that remains elevated, the CFO referenced a Category 5 cyclone, “Melissa,” in the Caribbean with roughly 300 km/h wind speeds, which management said cost Talanx EUR 340 million net due to a high market share in Jamaica. Management noted that a comparable event hitting a larger U.S. market could have produced significantly larger industry losses.
Balance sheet actions: realized bond losses and higher resiliency
Management repeatedly underscored efforts to increase resiliency. The CEO said the group issued about EUR 860 million in bonds “in order to strengthen our balance sheet.” In addition, the CFO described a repositioning of the fixed-income portfolio: the group sold low-coupon bonds purchased in the low-rate era and reinvested in bonds of the “same quality” with higher coupons, stating there was no shift in credit quality.
That move resulted in EUR 857 million of realized losses in the P&C area (excluding certain VFA portfolios, as specified on the call). The CFO described the expected benefit as roughly EUR 170 million more EBIT per year for the next five years, characterizing it as an improvement in future earnings quality through higher investment income.
On reserving and “resiliency” (an external actuarial assessment by Willis Towers Watson that was still in progress), management did not provide final figures but said it expected the overall resiliency measure to come in significantly above EUR 5 billion when it publishes details in May. The CFO also said he expected retail to show higher resiliency than reinsurance, given the portfolio mix.
Segment results: strong combined ratios and profit growth
Talanx reported strong underwriting performance across segments, with management highlighting combined ratios that benefited from favorable large loss experience.
- Corporate & Specialty (HDI Global): Management reported group net income up 10% to EUR 551 million. The CFO cited a combined ratio of 90.3% and return on equity of 17.3%, noting pricing by line of business was achieved “slightly above inflation” despite a softening market. For 2026, the company expects growth, a combined ratio below 92%, and ROE above 16%.
- Retail International: Insurance revenue rose 4% in euros (or 10% currency-adjusted). Net income increased 36% to EUR 611 million, which included a one-off from the Poland minority buyout; management said the buyout contributed EUR 68 million. Excluding that, net income growth would have been 21%, with ROE 16.3% excluding the effect (and 19.1% reported). Guidance for 2026 calls for mid- to single-digit growth in original currency, a combined ratio below 93%, and ROE above 16%.
- Retail Germany: The segment saw lower insurance revenue due to the end of the Targobank cooperation, which management said would be felt two-thirds in 2025 and one-third in 2026. Despite the top-line pressure, net income rose 6% to EUR 173 million, with ROE around 12%. Management described Retail Germany as small (about 7% of group revenue and 7% of net income) but an important cash contributor, providing about 15% of cash to Talanx AG (above EUR 200 million). For 2026, management expects a further single-digit revenue decline, a combined ratio below 93%, and double-digit ROE.
- Reinsurance (Hannover Re contribution): The CFO said Hannover Re’s group net income rose 13% to EUR 1.3 billion, supported by a combined ratio of 84% and ROE of 21.7%, also helped by the benign large-loss year. For 2026, management expects growth despite softening pricing, a combined ratio returning toward normal below 87%, and a net income contribution to Talanx (50% share) of at least EUR 1.35 billion, which management equated to more than EUR 2.7 billion profit on a 100% basis for Hannover Re.
Capital, solvency, and 2026 outlook
On capital management, the CFO said net asset value creation (equity growth plus dividends) was EUR 2.5 billion in 2025. He also described an “overall net asset value” view of about EUR 21.3 billion when adding contractual service margin and related items (as presented on the call).
The group’s solvency ratio was described as slightly above 240%, though management noted the audit was not complete and that final figures would be published in May. The CFO attributed the increase primarily to higher own funds with a stable solvency capital requirement, supported by higher interest rates (helping German life entities) and lower spreads at year-end.
For 2026, management guided to net income of around EUR 2.7 billion (described as roughly 9% growth) and return on equity around 19%. The CEO also said the company expects to propose a dividend of above EUR 4 next year (for the following payout), which management characterized as “above 10%” growth. Executives added that early 2026 large-loss usage was low versus budget, contributing to their confidence in the outlook.
In the Q&A, management said it was too early to quantify impacts from Middle East tensions, noting no material losses so far and limited exposure in Iran. They pointed to potential secondary effects such as interest rate moves, reiterating a “low beta” and conservative investment posture. On M&A, management said it remained open to deals but emphasized discipline, suggesting interest in opportunities in Latin America (including Mexico and Colombia) and in enhancing Corporate & Specialty, while expressing reluctance regarding reinsurance and noting limited availability in Retail Germany.
Concluding the call, Leue reiterated the company’s message of delivery against stated goals: “A promise is a promise.”
About Talanx (ETR:TLX)
Talanx AG provides insurance and reinsurance products and services worldwide. It offers life, casualty, liability, motor, aviation, legal protection, fire, burglary and theft, water damage, plate glass, windstorm, comprehensive householders, comprehensive home-owners, hail, livestock, engineering, omnium, marine, business interruption, travel assistance, aviation and space liability, financial lines, and other property insurance, as well as coverage for fire and fire loss of profits insurance. The company also provides bancassurance products; unit-linked life insurance, annuity and risk insurance, and long term and occupational disability insurance products; and personal accident insurance.
