Hannover Re has raised its profit target for 2024, projecting group net income of approximately €2.3 billion, up from its previous forecast of at least €2.1 billion.
For 2025, the company has introduced guidance for group net income of around €2.4 billion. The profit target adjustment follows a favorable business trajectory and a tax effect in the third quarter.
In the first nine months of 2024, Hannover Re reported a 30.4% increase in group net income, reaching €1.8 billion, compared to €1.4 billion for the same period last year. Gross reinsurance revenue increased by 6.4% to €19.7 billion, a figure that would have grown 7.0% at constant exchange rates. The reinsurance service result, which represents underwriting profitability less ceded business, rose by 36.4% to €2.1 billion.
Operating profit (EBIT) was up 33.3% to €2.4 billion, while earnings per share reached €15.13, compared to €11.60 in the prior year. A one-time tax effect of €120 million also supported the increase in net income.
The company’s annualized return on equity as of September 30, 2024, was 22.9%, with shareholders’ equity standing at €11.1 billion, up from €10.1 billion at year-end 2023. The book value per share grew to €92.39 from €83.97.
The contractual service margin (net), which represents future profits from current contracts, rose by 9.2% to €8.4 billion, reflecting both business growth and improved reinsurance terms. Hannover Re's Solvency II capital adequacy ratio was 260%, remaining above the threshold of 200%.
“In the first nine months of the year, Hannover Re continued to chart its successful course. Thanks to the adequate pricing level in property and casualty reinsurance, we are able to achieve a satisfactory level of earnings that puts us in a position to offer reliable reinsurance protection going forward, as we have in the past,” CEO Jean-Jacques Henchoz (pictured above) said.
In property and casualty reinsurance, the company’s reinsurance revenue rose by 9.4% to €13.9 billion, with large loss expenses amounting to €1.3 billion within a budget of €1.4 billion.
Key losses included €225 million from Central and Eastern Europe flooding, €130 million from Hurricane Helene, and €121 million from rain-related flooding in Dubai and parts of the UAE. Property and casualty’s combined ratio improved to 87.9%, and EBIT rose by 56.8% to €1.7 billion.
Life and health reinsurance showed results in line with expectations, with new financial solutions business growing amid demand in the US and longevity coverage in the UK and Australia.
Gross reinsurance revenue remained steady at €5.8 billion, with the reinsurance service result reaching €668 million. Operating profit in life and health reinsurance slipped by 1.9% to €716 million.
Hannover Re’s investment portfolio grew to €63.0 billion, achieving a 14.2% increase in the investment result, which totaled €1.4 billion. Return on investment reached 3.1%, surpassing the annual target.
CFO Clemens Jungsthöfel noted that a prudent investment approach contributed to the strong result, especially through fixed-income bonds and alternative assets like private equity and infrastructure investments.
Looking to the remainder of 2024, Hannover Re expects more than 5% growth in reinsurance revenue at constant exchange rates and forecasts a combined ratio below 89% for property and casualty reinsurance.
Life and health reinsurance should deliver a reinsurance service result exceeding €850 million. The investment portfolio is expected to grow modestly, with an investment return of at least 2.8%.
Hannover Re's dividend policy is to increase ordinary dividends annually through 2026, supplemented by a special dividend if capital levels surpass those needed for growth and profit targets are met.
For 2025, the company expects €2.4 billion in group net income, with property and casualty reinsurance revenue anticipated to rise by more than 7% and a combined ratio below 88%. In life and health, Hannover Re projects a 2% increase in CSM (net) and a reinsurance service result over €875 million. The company also targets an investment return of at least 3.2%.
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