Hannover Re increases half-year result and further strengthens balance sheet resilience

Hannover Re increases half-year result and further strengthens balance sheet resilience

• Group net income grows by 13.2% to EUR 1.3 billion
• Return on equity of 23.0% comfortably above strategic target
• Reinsurance revenue in property and casualty reinsurance up by 4.8%
• Combined ratio of 88.4% slightly higher than full-year target after strengthening resilience of the loss reserves
• Reinsurance service result in life and health reinsurance amounting to EUR 444.5 million in line with expectations
• Return on investment reaches 3.3%
• Guidance for 2025 confirmed

Hannover, 12 August 2025: Despite high catastrophe losses in the first quarter, Hannover Re generated a good half-year result and additionally strengthened the resilience in its loss reserves.

"After the considerable expenditures for losses in the first quarter, large losses were far more moderate in the second quarter. Overall, we can look back on a good business performance in the first half-year," said Clemens Jungsthöfel, Chief Executive Officer of Hannover Re. "Prices and conditions on the reinsurance market remain on an adequate level. At the same time, we have further strengthened Hannover Re's resilience and continue to invest in our efficient positioning and capacity for innovation. Even in volatile times, we are thus able to offer our clients high-quality risk protection."

Group net income grows by 13.2% to EUR 1.3 billion

Reinsurance revenue (gross) increased by 3.3% to EUR 13.3 billion (previous year: EUR 12.9 billion). Growth of 4.3% would have been booked at unchanged exchange rates.

The reinsurance service result (net), reflecting the profitability of underwriting activity less business ceded (primarily retrocessions and insurance-linked securities), remained stable at EUR 1.4 billion (EUR 1.4 billion). Adjusted for exchange rate effects, the reinsurance finance result (net) – which is structurally negative and reflects the interest accretion on technical reserves discounted in previous years – decreased to EUR -667.6 million (EUR -499.7 million).

The currency result improved significantly to EUR 236.1 million (EUR -56.7 million), driven largely by the appreciation of the euro against the US dollar. Other income and expenses amounted to EUR -272.1 million (EUR -207.2 million).

The operating profit (EBIT) grew by 6.3 % to EUR 1.8 billion (EUR 1.7 billion). Group net income increased by 13.2% to EUR 1.3 billion (EUR 1.2 billion). Earnings per share reached EUR 10.90 (EUR 9.63).

Return on equity of 23.0% comfortably above strategic target

Shareholders' equity amounted to EUR 11.1 billion as at 30 June 2025 (31 December 2024: EUR 11.8 billion). The book value per share reached EUR 92.00 (31 December 2024: EUR 97.80). The annualised return on equity stood at 23.0% (22.3%) and was thus comfortably above the strategic target of more than 14%.

The contractual service margin (net), quantifying the unearned profits on business written, increased by 3.8% to EUR 8.5 billion (31 December 2024: EUR 8.2 billion). The risk adjustment for non-financial risk amounted to EUR 3.6 billion (31 December 2024: EUR 4.0 billion).

The capital adequacy ratio under Solvency II, which measures the risk-carrying capacity of Hannover Re, amounted to 261% at the end of June (31 December 2024: 261%). It makes allowance for the foreseeable ordinary dividend for 2025 on a pro-rata basis as well as planned business growth in 2025 and remains clearly above the threshold of more than 200%. Hannover Re's robust capitalisation enabled the company to redeem a hybrid bond in the second quarter without refinancing.

"On the basis of the good business performance of the past six months and the positive currency result, we further strengthened our balance sheet. In concrete terms, we have further increased the level of reserves in property and casualty reinsurance," said Christian Hermelingmeier, Chief Financial Officer of Hannover Re. "This measure not only prepares us better for future loss events, but also enables us to continue to minimise earnings volatility in the future."

Good business performance in property and casualty reinsurance and further strengthening of resilience in the loss reserves

The main renewal season in property and casualty reinsurance as at 1 January 2025 brought premium growth with largely stable conditions for Hannover Re. The renewals on 1 April 2025, traditionally in the Asia-Pacific region, North America and some specialty lines, passed off with stable or slightly softer conditions on a pricing level that remained attractive.

The new business CSM (net) rose by 7.0% to EUR 1.99 billion (EUR 1.86 billion). The new business LC (net) amounted to EUR 29.6 million (EUR 15.7 million).

Reinsurance revenue (gross) in property and casualty reinsurance grew by 4.8% to EUR 9.5 billion (EUR 9.1 billion). Growth would have reached 6.0% at unchanged exchange rates.

Expenditures for large losses totalled EUR 976.1 million (EUR 566.5 million) in the first six months. Driven primarily by the California wildfires in the first quarter, they thus came in slightly higher than our budgeted expectation of EUR 935 million.

The largest net individual losses for Hannover Re were the aforementioned California wildfires at EUR 615.1 million, the fire at an oil refinery in the US state of Texas at EUR 76.0 million, the Myanmar earthquake at EUR 59.0 million as well as an extensive series of tornadoes in the US Midwest at a cost of EUR 50.0 million.

The resilience in the loss reserves, which an external study put at EUR 2.5 billion effective 31 December 2024, was further boosted in the first half of the year through continued adherence to a prudent reserving policy.

The reinsurance service result (net) increased to EUR 975.1 million (EUR 963.3 million). The combined ratio stood at 88.4% (87.8%) and was thus slightly higher than the expected full-year figure of less than 88%. Adjusted for exchange rate effects, the reinsurance finance result (net) amounted to EUR -571.7 million (EUR -419.9 million).

The operating profit (EBIT) in property and casualty reinsurance rose by 11.6% to EUR 1.3 billion (EUR 1.2 billion).

Life and health reinsurance develops as anticipated

Hannover Re generated a result in life and health reinsurance for the first half of the year that was in line with expectations, thanks in particular to the favourable development of business with longevity covers and financial solutions.

The new business CSM (net) increased to EUR 216.6 million (EUR 184.8 million), while the loss component (net) amounted to EUR 16.3 million (EUR 9.9 million). In addition, contract renewals and amendments in the in-force portfolio came to EUR 148.1 million (EUR 201.3 million). The contractual service margin (net) changed by -2.9% to EUR 6.3 billion (31 December 2024: EUR 6.5 billion).

Reinsurance revenue (gross) contracted slightly to EUR 3.80 billion (EUR 3.82 billion). Growth of 0.3% would have been recorded at unchanged exchange rates.

The reinsurance service result (net) decreased as expected to EUR 444.5 million (EUR 448.1 million) and was thus still on a good level for achieving the full-year target of more than EUR 875 million. Adjusted for exchange rate effects, the reinsurance finance result (net) declined to EUR -95.9 million (EUR -79.9 million).

The operating result (EBIT) in life and health reinsurance retreated by -6.3% to EUR 469.9 million (EUR 501.4 million).

Return on investment reaches 3.3%

The portfolio of investments contracted to EUR 62.6 billion (31 December 2024: EUR 65.9 billion), principally due to revaluation effects associated with investments held in US dollars.

The investment result came in at EUR 1.0 billion (EUR 1.0 billion). The annualised return on investment reached 3.3% and was thus well on track for achieving the full-year target of at least 3.2%.

Guidance for 2025 confirmed: Group net income of around EUR 2.4 billion

"Our lean, partnership-based business model, our pragmatic corporate culture and our resilience remain as indispensable for sustainable reinsurance protection as adequate prices and conditions on the market," said Clemens Jungsthöfel. "Based on the numbers for the first six months, I am confident of our ability to generate further profitable growth in the second half of the year and achieve our full-year targets."

The treaty renewals in property and casualty reinsurance on 1 June and 1 July 2025 saw modest price declines for Hannover Re. Parts of the North American portfolio, especially natural catastrophe risks, as well as business from Australia and New Zealand and in the credit and surety lines are traditionally renewed in June and July. The volume changed by altogether -2.1%, primarily due to reduction of a large contract. Had it not been for this effect, growth of 4.5% would have been booked. The inflation- and risk-adjusted price change for the renewed business was -2.9%.

Reinsurance revenue (gross) in property and casualty reinsurance is expected to grow by more than 7% adjusted for exchange rate effects, while the combined ratio is projected to come in under 88%.

Hannover Re anticipates a reinsurance service result (net) of more than EUR 875 million in life and health reinsurance. The contractual service margin (net) is expected to grow by around 2%.

The return on investment should reach at least 3.2%.

As usual, achievement of the earnings guidance for 2025 assumes that there are no unforeseen distortions on capital markets and that large loss expenditure does not significantly exceed the expected level of EUR 2.1 billion.

The ordinary dividend is expected to increase year-on-year over the 2024-2026 strategy cycle. The ordinary dividend will be supplemented by a special dividend provided the capitalisation exceeds the capital required for future growth and the profit target is achieved.
 

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 around 4,000 employees. 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".

This press information is provided without any guarantee whatsoever. https://www.hannover-re.com/en/legal-information/#press-releases-disclaimer

 

Contact:

External Communications:
Oliver Suess
tel. +49 511 5604-1502
oliver.suess@hannover-re.com
 

Arne Ellerbrock
tel. +49 511 5604-4363
arne.ellerbrock@hannover-re.com
 

Investor Relations:
Karl Steinle
tel. +49 511 5604-1500
karl.steinle@hannover-re.com
 

Axel Bock
tel. +49 511 5604-1736
axel.bock@hannover-re.com
 

www.hannover-re.com

 

	2024		2025
in EUR million	Q2	YTD	Q2	YTD	+/–  previous year (Q2)
Hannover Re Group
Results
Reinsurance revenue (gross)	6,244	12,916	6,369	13,338	+3.3 %
Reinsurance service result (net)	691	1,411	905	1,420	+0.6 %
Reinsurance finance result (net) ¹	-238	-500	-334	-668	+33.6 %
Net income from investments	511	1,009	469	1,046	+3.6 %
Operating profit / loss (EBIT)	847	1,657	1,065	1,762	+6.3 %
Group net income	603	1,161	833	1,314	+13.2 %
Balance sheet
Policyholders' surplus	14,732	14,732	14,689		-7.7 %
Equity attributable to shareholders of Hannover Rück SE	10,666	10,666	11,095		-5.9 %
Non-controlling interests	834	834	859		-3.9 %
Hybrid capital	3,232	3,232	2,735		-15.4 %
Contractual service margin (net)	9,274	9,274	8,473		+3.8 %
Risk-Adjustment	3,968	3,968	3,636		-9.2 %
Investments	61,976	61,976	62,627		-4.9 %
Total assets	68,224	67,503	69,358		-3.8 %
Ratios
Combined ratio (property and casualty reinsurance) ²	87.6%	87.8%	82.1%	88.4%
EBIT margin ³	16.1%	14.7%	18.9%	14.9%
Return on investment	3.3%	3.3%	2.9%	3.3%
Return on equity	22.4%	22.3%	28.8%	23.0%
Share
Earnings per share (basic and diluted) in EUR	5.00	9.63	6.91	10.90	+13.2 %
Book value per share in EUR	88.45	88.45	92.00	92.00	-5.9 %
Share price at the end of the period in EUR	236.70	236.70	267.20	267.20	+10.7 %
Market capitalisation at the end of the period	28,545	28,545	32,224	32,224	+10.7 %
Property & Casualty reinsurance
Reinsurance revenue (gross)	4,356	9,099	4,453	9,539	+4.8 %
Reinsurance revenue (net)	3,655	7,895	3,924	8,403	+6.4 %
Reinsurance service result (net)	454	963	703	975	+1.2 %
Reinsurance finance result (net) ¹	-192	-420	-289	-572	+36.2 %
Net income from investments	376	797	363	832	+4.4 %
Operating profit / loss (EBIT)	532	1,160	851	1,295	+11.6 %
EBIT margin ³	14.5%	14.7%	21.7%	15.4%
Combined ratio ²	87.6%	87.8%	82.1%	88.4%
New business CSM incl. Loss Component	418	1,848	445	1,965	+6.3 %
Life & Health reinsurance
Reinsurance revenue (gross)	1,888	3,817	1,916	3,799	-0.5 %
Reinsurance revenue (net)	1,601	3,363	1,700	3,440	+2.3 %
Reinsurance service result (net)	237	448	201	445	-0.8 %
Reinsurance finance result (net) ¹	-47	-80	-45	-96	+20.0 %
Net income from investments	135	211	105	213	+0.9 %
Operating profit / loss (EBIT)	320	501	217	470	-6.3 %
EBIT margin ³	20.0%	14.9%	12.8%	13.7%
New business CSM incl. Loss Component	86	175	77	200	+14.5 %
¹ Excluding exchange rate effects
² Reinsurance service result / reinsurance revenue (net)
³ EBIT / reinsurance revenue (net)