Q1 2016 net income rose 16% yoy, driven by a capital gain on the sale of the Bürgel entities. Underwriting result fell 17% yoy but up 44% qoq, with a combined ratio that clearly showed that action plans initiated in 2015 have started to deliver (79.3% in Q1 2016 vs. 76.1% in Q1 2015 and 85.3% in H2 2015). Management reaffirmed its commitment to address the excess capital issue (up to EUR191m at end-2015, but bear in mind that Euler Hermes’ current leverage is 0) at some point later this year. At this stage, we maintain our FY numbers. We are making no change to our Buy recommendation and EUR96 FV.
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