EQS-News: Hannover Re increases premium volume in the renewals and achieves Group profit of EUR 2.3 billion for 2024

Hannover Re increases premium volume in the renewals and achieves Group profit of EUR 2.3 billion for 2024

• Premium growth of 7.6% in the renewals in traditional property and casualty reinsurance as of 1 January
• Sustained high quality of the business based on broadly stable conditions
• Modest average inflation- and risk-adjusted price decline of 2.1%
• Preliminary Group net income of EUR 2.3 billion for 2024 in line with expectations
• Guidance for 2025 confirmed: Group net income of around EUR 2.4 billion

Hannover, 6 February 2025: Hannover Re increased the premium income in traditional property and casualty reinsurance by 7.6% in the treaty renewals as at 1 January 2025. The good quality of the renewed business was maintained, while an average inflation- and risk-adjusted price decline of 2.1% was recorded.

"We can look back on successful renewals in a market that remains attractive. This enabled us to generate further profitable growth in our book of business," said Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re. "Demand for high-quality reinsurance capacities was once again higher than in the previous year. Thanks to our very healthy capitalisation, we were able to offer our clients more reinsurance protection at appropriate conditions."

Based on preliminary unaudited financials, Group net income increased in the 2024 financial year to EUR 2.3 billion. Hannover Re thus achieved its earnings target, which it had raised to around EUR 2.3 billion in the fourth quarter of 2024.

Significant premium growth in the 1 January renewals

Treaties with a premium volume of EUR 10.3 billion were up for renewal on 1 January 2025. This corresponds to 59% of business in traditional property and casualty reinsurance (excluding facultative reinsurance, ILS business and structured reinsurance).

Hannover Re renewed treaties with a premium volume of EUR 9,304 million, while treaties worth EUR 950 million were cancelled. Together with EUR 1,734 million from new treaties and from changes in prices and treaty shares, the total renewed premium volume grew by 7.6% to EUR 11,038 million. Overall, prices were stable or slightly down.

"Reinsurance prices are still on a level commensurate with the risks, although loss-free treaties, in particular, saw increased competition, leading to price reductions in especially competitive lines. At the same time, however, conditions and retentions remained extensively unchanged. Most notably, the good quality of our portfolio coupled with sustained strong demand gives us confidence as we look ahead to further renewals during the year," said Sven Althoff, the member of Hannover Re's Executive Board responsible for property and casualty reinsurance. "Adequate prices and conditions continue to be indispensable for sustainable reinsurance protection. This is all the more true given that climate change and associated extreme weather events remain one of our greatest challenges. The wildfires around Los Angeles have underscored this once again."

Regional markets: Continued attractive price level

Hannover Re's premium volume in the region Europe, Middle East and Africa grew by 9.7%. An increased supply of reinsurance capacity led to rate erosion, while conditions remained good. In Germany, Hannover Re increased its premium volume on the back of attractive risk-adjusted prices and thereby maintained its strong market position. The Middle East and Türkiye recorded significant rate improvements for loss-affected business.

The premium volume in the Americas region increased by 13.5%. Large parts of the portfolio here come up for renewal on 1 June and 1 July 2025. The property insurance market in the United States remains attractive despite appreciable pricing pressure, while in the liability segment risk-adjusted price improvements were possible. Particularly substantial premium growth was booked in business with insurtechs, although volume was also boosted elsewhere in the property and casualty portfolio. The wildfires in and around Los Angeles will likely have a significant impact on property insurance renewals during the year.

The premium volume in the Asia-Pacific region grew by a modest 0.8%. Competition here remained intense overall, especially in Southeast Asia and China. Opportunities for growth at adequate prices opened up in selected markets such as Indonesia, Singapore and Vietnam.

Worldwide markets: Sustained good quality of the business written

The premium volume in the credit, surety and political risks lines grew by 4.5% in a favourable market environment. Aviation and marine reinsurance saw premium volume contract by 6.2%. While Hannover Re was able to further enlarge its market share in the aviation sector, surplus capacities in marine business resulted in moderate price declines despite significant large loss expenditure. The premium volume booked by Hannover Re in agricultural lines declined by 9.2%. This was driven by, among other things, a planned reduction of the business volume in China on profitability grounds.

With sustained strong demand for solutions offering capital relief, Hannover Re benefits from its leading market position in structured reinsurance. An above-average, double-digit growth rate is therefore anticipated for 2025. The renewals in facultative reinsurance passed off with the expected stability in view of the attractive market environment, although the risk-adjusted prices retreated somewhat coming off a high level.

Hannover Re slightly extended its strong market position in natural catastrophe business on the back of a continued adequate price level and stable conditions. The risk-adjusted price decline in this segment amounted to 5.4%, with erosion most striking in US business. The retentions carried by ceding companies nevertheless remained on a stable level and were in some cases further increased under loss-impacted business.

Preliminary key figures for the full 2024 financial year

Based on preliminary unaudited financials, Hannover Re generated reinsurance revenue of EUR 26.4 billion (EUR 24.5 billion) in the 2024 financial year.

The operating profit (EBIT) amounted to EUR 3.3 billion (EUR 1.97 billion). Property and casualty reinsurance contributed EUR 2.4 billion (EUR 1.1 billion) to the operating result, while life and health reinsurance accounted for a share of EUR 934 million (EUR 871 million).

Group net income increased to EUR 2.3 billion (EUR 1.8 billion). Hannover Re thus achieved its full-year profit target of around EUR 2.3 billion.

Guidance for 2025 confirmed

"Looking ahead to our targets for 2025, the successful renewals in January give me grounds for optimism. Growth in traditional business as well as the double-digit increase in structured reinsurance will be pivotal to achieving our growth target for 2025," said Jean-Jacques Henchoz. "We already recorded the first significant large loss event shortly after the start of the year with the California wildfires. We therefore continue to place considerable emphasis on our prudent underwriting policy and our risk management."

As already announced in November, Hannover Re anticipates Group net income of around EUR 2.4 billion for the 2025 financial year.

Adjusted for exchange rate effects, the growth in reinsurance revenue (gross) in property and casualty reinsurance is projected to be more than 7%. Hannover Re expects the combined ratio in the Property & Casualty reinsurance business group to be under 88% in 2025 owing to the improved market environment.

Hannover Re anticipates a reinsurance service result of more than EUR 875 million in the Life & Health reinsurance business group. The Contractual Service Margin (net) in life and health reinsurance is projected to grow by around 2%.

The return on investment should reach at least 3.2%.

Achievement of the earnings guidance for 2025 is based on the premise that large loss expenditure does not significantly exceed the budgeted amount of EUR 2.1 billion (EUR 1.825 billion) and assumes that there are no unforeseen distortions on capital markets.

Hannover Re will publish its audited annual financial statement on 13 March 2025.

 

Hannover Re is one of the world’s leading reinsurers. It transacts all lines of property & casualty and life & health reinsurance and is present worldwide with more than 3,500 staff. German business of the Hannover Re Group is written by the subsidiary E+S Rück. Established in 1966, Hannover Re is recognised as a reliable partner for innovative risk solutions, exceptional customer intimacy and financial soundness. The rating agencies most relevant to the insurance industry have awarded both Hannover Re and E+S Rück outstanding financial strength ratings: Standard & Poor's AA- "Very Strong" and A.M. Best A+ "Superior".

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