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1. Company Snapshot

1.a. Company Description

Talanx AG provides insurance and reinsurance products and services worldwide.The company 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.It also provides bancassurance products; unit linked life insurance, annuity and risk insurance, and long term and occupational disability insurance products; personal accident insurance; and Sharia-compliant retakaful reinsurance products.


The company offers property and casualty, marine and aviation, credit/surety, agriculture, structured, and life and health reinsurance, as well as engages in the facultative and nat cat, and asset management businesses.The company was founded in 1996 and is based in Hanover, Germany.Talanx AG operates as a subsidiary of HDI Haftpflichtverband der Deutschen Industrie Versicherungsverein auf Gegenseitigkeit.

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1.b. Last Insights on TLX

Talanx AG's recent performance was driven by a historic year of significant revenue and net income growth, with a 25% surge in net income and a 60% jump in operating profit to €4.9bn. The company's insurance segment, particularly HDI Global, reported a 10% increase in revenue and a 58% rise in operating profit to €702m. Additionally, the company's strategic plans for future expansion, including the offloading of its Ecuador unit to Grupo Financiero Atlántida, demonstrate a focus on consolidating its portfolio and optimizing operations.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Talanx (XTRA:TLX): Exploring the Latest Valuation Perspectives After Recent Share Performance Shifts

Oct -06

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HDI Global posts €141m net income in Q1 2025

May -23

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Talanx posts 5% rise in Q1 2025 net income

May -19

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HDI Global insurance revenue up 10% in 2024

Mar -26

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Talanx net income soars 25% in 2024

Mar -20

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Talanx AG (TLLXY) Q4 2024 Earnings Call Highlights: Record Growth and Strategic Insights

Mar -20

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Talanx to offload Ecuador unit to Grupo Financiero Atlántida

Feb -25

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February 2025's Best Dividend Stocks To Consider

Feb -10

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.88%)

6. Segments

Property/Casualty Reinsurance

Expected Growth: 5.5%

The Property/Casualty Reinsurance segment of Talanx AG is expected to grow at a CAGR of 5.5%, driven by increasing demand for risk management solutions globally. Fundamental drivers include rising awareness of potential risks, growth in insurance penetration, and expanding client base. The segment's diversified portfolio and strong capital position also support its growth prospects.

International Private and Corporate Insurance

Expected Growth: 5.5%

Talanx AG's diversified portfolio, expertise in risk assessment, and strong global presence drive growth. Increasing demand for customized insurance solutions, particularly in emerging markets, and a focus on digitalization are expected to fuel a 5.5% CAGR. Strong underwriting performance and expanding product offerings will likely support the growth trajectory.

Corporate & Specialty

Expected Growth: 5.0%

Talanx AG's Corporate & Specialty segment is poised for steady growth driven by increasing demand for customized risk management solutions from large corporate clients. Strong expertise in managing complex risks and expansion into new markets will fuel growth, supported by a robust underwriting discipline and favorable industry trends.

Private and Corporate Insurance Germany

Expected Growth: 4.5%

Talanx AG's Private and Corporate Insurance in Germany is expected to grow at a CAGR of 4.5%, driven by increasing demand for tailored insurance solutions, rising awareness of risk management, and a growing corporate sector. Strong brand reputation and diversified product portfolio will also contribute to growth.

Life/Health Reinsurance

Expected Growth: 8.5%

Talanx AG's life/health reinsurance segment is poised for growth due to increasing demand for risk management solutions from insurers. Favorable demographic trends, rising healthcare costs, and expanding insurance markets in emerging economies are key drivers. The company's diversified portfolio and expertise in underwriting and risk assessment also support growth prospects.

Consolidation

Expected Growth: 5.5%

Talanx AG's consolidation strategy drives growth through synergies, improved risk management, and enhanced capital efficiency. Fundamental drivers include increasing market share, diversified business portfolio, and stringent regulatory compliance. The company's financial statements reflect a steady growth trajectory, supporting a forecast CAGR of 5.5% in the reinsurance segment.

Corporate Operations

Expected Growth: 5.5%

Talanx AG's corporate operations are expected to grow at a CAGR of 5.5%, driven by digital transformation and strategic partnerships. Fundamental drivers include increasing demand for insurance services, expansion into new markets, and a focus on operational efficiency. This growth is also fueled by the company's commitment to innovation and customer-centric approach.

7. Detailed Products

Industrial Lines Insurance

Industrial Lines Insurance provides coverage for industrial risks such as property damage, business interruption, and liability. This includes products like fire insurance, storm and flood insurance, and engineering insurance.

Cyber Insurance

Cyber Insurance offers protection against cyber threats and data breaches, providing coverage for damages and losses resulting from cyber-attacks, as well as support for crisis management and data recovery.

Life Insurance

Life Insurance provides financial protection for individuals and families in the event of death, disability, or serious illness. This includes term life insurance, whole life insurance, and unit-linked life insurance.

Health Insurance

Health Insurance offers coverage for medical expenses, including inpatient and outpatient treatments, pharmaceuticals, and alternative therapies.

Property Casualty Insurance

Property Casualty Insurance provides coverage for damages to property and assets, as well as liability protection for individuals and businesses.

Reinsurance

Reinsurance provides insurance coverage for insurance companies, allowing them to manage their risk exposure and increase their capacity to underwrite policies.

Asset Management

Asset Management provides investment management services for individuals, companies, and institutional investors, including portfolio management, wealth management, and investment advice.

8. Talanx AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Talanx AG operates in the insurance industry, which has a moderate threat of substitutes. While there are alternative risk management options available, such as self-insurance or alternative risk transfer solutions, the traditional insurance market remains a dominant player.

Bargaining Power Of Customers

Talanx AG's customers are typically large corporations or insurance brokers, which can negotiate prices and terms. However, the company's diversified portfolio and strong market position limit the bargaining power of individual customers.

Bargaining Power Of Suppliers

The insurance industry has a large number of suppliers, including reinsurers, brokers, and investment managers. Talanx AG's scale and market position give it significant negotiating power with suppliers.

Threat Of New Entrants

The insurance industry is heavily regulated, and new entrants face significant barriers to entry, including capital requirements, licensing, and expertise. Talanx AG's established brand and expertise make it difficult for new entrants to compete.

Intensity Of Rivalry

The insurance industry is highly competitive, with many established players competing for market share. Talanx AG faces intense rivalry from other insurers, particularly in the commercial and specialty insurance segments.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.98%
Debt Cost 4.52%
Equity Weight 57.02%
Equity Cost 7.49%
WACC 6.22%
Leverage 75.36%

11. Quality Control: Talanx AG passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Value: 7.0

Growth: 4.9

Quality: 7.5

Yield: 8.1

Momentum: 7.5

Volatility: 9.3

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A-Score: 7.1/10

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Growth: 2.8

Quality: 6.1

Yield: 8.8

Momentum: 8.0

Volatility: 9.3

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Zurich Insurance

A-Score: 6.7/10

Value: 3.4

Growth: 4.6

Quality: 7.6

Yield: 8.1

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Volatility: 10.0

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Talanx

A-Score: 6.7/10

Value: 7.3

Growth: 3.4

Quality: 7.0

Yield: 5.6

Momentum: 9.0

Volatility: 7.7

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A-Score: 6.6/10

Value: 5.9

Growth: 3.9

Quality: 5.5

Yield: 9.4

Momentum: 6.5

Volatility: 8.7

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A-Score: 5.8/10

Value: 2.2

Growth: 2.2

Quality: 5.9

Yield: 7.5

Momentum: 7.0

Volatility: 10.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

108.2$

Current Price

108.2$

Potential

-0.00%

Expected Cash-Flows