Hannover Re owner Talanx managed to grow profits in the first half of the year despite an uptick in German fire and property losses in its industrial lines unit.

“We are not satisfied with the results in the industrial lines’ fire line in Germany,” the carrier said revealing that it was looking to slash the combined ratio for the underperforming 20 percent of the EUR2.9bn ($3.3bn) portfolio.

The group said it had installed new management to restructure fire insurance with a focus on Germany as it targets premium increases of 20 percent by 2020 in a project it is calling its “20/20/20 programme”.

It is targeting a combined ratio that is “well below” 100 percent in the segment, Talanx said.

“The sector expects that overall industrial property insurance in Germany will have a combined ratio of 115 percent for 2018. In the first half of 2018, unfortunately, we as well were unable to escape this,” said Talanx industrial lines boss Christian Hinsch.

“Thanks to our 20/20/20 programme, we will significantly reduce the combined ratio, especially for German fire insurance, over the next 18 months to return to a positive underwriting result,” he went on, adding: “This includes the reduction in market share and giving up some business.”

As a result of the increased losses, the industrial lines division slipped to a EUR28mn underwriting loss as the combined ratio swelled to 102.3 percent, well above the 97.2 percent it reported for the first half of last year.

At a group level, Talanx reported a combined ratio that improved by 30 basis points to 96.7 percent as gross premiums climbed by 6.9 percent to EUR18.8bn.

Last week, Hannover Re reported a property and casualty top line that swelled by 19.2 percent in the first half of the year driven by a surge in demand for structured reinsurance solutions.