Hannover Re has reported an inflation- and risk-adjusted rate increase of 2.3% for its treaty renewals as of January 1, 2024, in the traditional property and casualty reinsurance sector.
This development, Hannover Re explained, comes amid a market landscape that appears more stable compared to the preceding year, coupled with an increased demand for reinsurance capacity, predominantly from existing market participants.
The renewal process involved treaties worth €9,552 million, accounting for 62% of the company’s traditional property and casualty reinsurance business. Hannover Re successfully renewed a premium volume of €8,671 million. The total renewed premium volume, factoring in new treaties and adjustments in prices and treaty shares, marked a 6.9% increase to €10,212 million in a favorable market setting.
The firm noted that pricing remained generally stable or saw slight increases, with non-proportional reinsurance experiencing more robust growth of 10.6% to €3,178 million, reflecting a risk-adjusted price rise of 4.4%. Proportional reinsurance expanded by 5.3% to €7,034 million, with a 1.3% increase in price after risk adjustment.
Regionally, the company detailed varying responses to the challenges of large losses, with specific adjustments in pricing, retentions, and conditions across different markets, including Europe, the Middle East, Africa, and notably within Germany and Italy. The Americas region reported growth of 2.2%, with further renegotiations expected in mid-2024. Adjustments were also made in response to natural disaster losses in North America and competitive pressures in the cyber insurance market.
In the Asia-Pacific region, Hannover Re recorded a 10.1% increase in premium volume, benefiting from adequate pricing and improved terms following catastrophe losses.
The report also highlighted significant terms and condition improvements in specific lines such as credit, surety, and political risks, aviation and marine reinsurance, and agricultural insurance, where Hannover Re saw notable growth and was able to capitalize on market opportunities in Brazil and China.
Looking ahead, Hannover Re confirmed its guidance for 2024, expecting a group net income of at least €2.1 billion and projecting revenue growth of over 5% across the group.
The company also anticipates a combined ratio under 89% for its property & casualty reinsurance segment and a reinsurance service result of more than €850 million for the life & health reinsurance segment, assuming large loss expenditures do not significantly exceed the planned amount and capital markets remain stable.
Jean-Jacques Henchoz, CEO of Hannover Re, expressed contentment with the renewal outcomes, highlighting the company’s ability to secure rate enhancements across various lines and regions in light of 2023’s loss experiences, persistent high inflation, and geopolitical uncertainties.
“Building on the previous year’s sustained improvement in the quality of our book of business, we are thus well placed to tackle future challenges,” Henchoz said.
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