FRANKFURT (Bloomberg) ? Hannover Re, the world?s fourth- biggest reinsurer, returned to a profit in the third quarter and raised its full-year profit outlook as costly hurricanes, which forced it to report a loss a year ago, didn?t recur.

Net income in the quarter rose to 123.5 million euros ($158.3 million), or 1.02 euros a share, after a loss of 184 million euros, or 1.53 euros a share, a year earlier. That beat the 117 million-euro median estimate of 14 analysts surveyed by Bloomberg News. Net premium income fell 0.5 percent to 1.91 billion euros, Hannover Re said.

?All underwriting business groups lived up to or indeed surpassed our expectations and delivered a healthy profit,? Hannover Re Chief Executive Officer Wilhelm Zeller said in the statement.

Zeller, 62, raised the reinsurer?s forecast for full-year net income to around 480 million euros from an earlier estimate of about 450 million euros, helped by this year?s benign Atlantic hurricane season, which started in June and ends this month. Zeller last year was forced to cut the company?s profit forecast twice amid record damage claims related to hurricanes.

Hannover Re shares declined 44 cents, or 1.3 percent, to 33.76 euros in Frankfurt. They have risen 23 percent since the end of June, compared with a 14 percent increase in the 29- member Bloomberg Europe 500 Insurance Index.

The improved earnings outlook isn?t ?enough to produce a further step-up,? given the shares? recent gains, William Hawkins, an analyst at Keefe, Bruyette & Woods in London, wrote in a note to clients. He has an ?underperform? rating on the stock.

This year?s Atlantic hurricane season hasn?t resulted in any major storm losses for the insurance industry. In contrast, last year?s season was the most expensive in the industry?s history, with estimated claims of about $60 billion, according to Munich Re, the world?s second-biggest reinsurer. Reinsurers help insurers such as Allianz SE and Axa SA shoulder risks they assume for clients.

Hannover Re previously forecast full-year return on equity of 15 percent. This measure of profitability would translate to net income of about 450 million euros, based on 3 billion euros of current shareholders? equity and average disaster costs, the reinsurer said in March. It now expects return on equity ?comfortably in excess of 15 percent.?

Hannover Re reiterated that it expects gross premium income to rise approximately 5 percent this year, up from 9.67 billion euros in 2005.

Net premium income in property and casualty reinsurance, Hannover Re?s biggest division, fell 5.5 percent to 930.3 million euros. The unit?s net income, was 100.6 million euros compared with a year-ago loss of 160.7 million euros.

For every euro in property and casualty reinsurance premiums collected, the company used 97.2 cents to pay claims and expenses.