Hannover Re increases Group profit in the first quarter by 48 percent

Hannover Re increases Group profit in the first quarter by 48 percent

• Group net income rises to EUR 710.6 million
• Reinsurance revenue (gross) on the Group level grows by 0.6% adjusted for exchange rate effects
• Significant premium growth of 18.8% in April renewals
• Large losses in property and casualty reinsurance below budgeted expectation at EUR 206.9 million
• Life and health reinsurance develops favourably as anticipated
• Annualised return on investment of 3.6% above the full-year target of around 3.5%
• Return on equity clearly above strategic target at 21.2%
• Guidance: Full-year targets for 2026 confirmed

Hannover, 11 May 2026: Despite market headwinds, Hannover Re sharply increased its Group net income in the first quarter of 2026 by 47.9% to EUR 710.6 million (EUR 480.5 million) and confirms its full-year targets.

“Hannover Re has made a successful start to the 2026 financial year. Our Group net income for the first quarter once again underscores the strength of our diversified business model and our ability to show attractive earnings growth even in a more challenging market,” said Clemens Jungsthöfel, Chief Executive Officer of Hannover Re. “Thanks to our robust positioning in the market, very good capitalisation and lean cost structures, we enjoy considerable financial resilience. This forms the basis for further strengthening our sustained profitability going forward.”

Group net income rises sharply by 47.9% to EUR 710.6 million

Reinsurance revenue (gross) on the Group level reached EUR 6.5 billion as at the end of March (previous year: EUR 7.0 billion). Reinsurance revenue would have grown by 0.6% at constant exchange rates. Life and health reinsurance contributed currency-adjusted growth of 15.0%. Property and casualty reinsurance experienced a decline in revenue of 4.7% at unchanged exchange rates. While traditional reinsurance delivered diversified growth of 2.1% adjusted for exchange rate effects, revenue in structured reinsurance declined due to the reduction of individual larger-volume contracts.

Based on the profitable premium growth of 18.8% generated in the April renewals, Hannover Re remains confident to achieve the full-year target for revenue growth in traditional property and casualty reinsurance in the mid-single-digit percentage range.

The reinsurance service result (net), reflecting the profitability of underwriting activity less business ceded (primarily retrocessions and insurance-linked securities), increased significantly by 72.9% to EUR 890.2 million (EUR 514.8 million). This had been influenced in the previous year’s period by the exceptional large losses caused by wildfires in California. The reinsurance finance result (net) adjusted for exchange rate effects, which is structurally negative and reflects the interest accretion on technical reserves discounted in prior years, stood at EUR -360.1 million (EUR -333.3 million).

The currency result decreased to EUR -24.4 million (EUR 66.4 million), largely due to the appreciation of various currencies against the euro. Other income and expenses amounted to EUR -140.0 million (EUR -128.3 million).

The Group’s operating profit (EBIT) rose by 39.4% to EUR 971.1 million (EUR 696.5 million). Group net income increased sharply by 47.9% to EUR 710.6 million (EUR 480.5 million). Earnings per share reached EUR 5.89 (EUR 3.98).

Return on equity clearly above strategic target at 21.2%

Shareholders’ equity amounted to EUR 13.9 billion as at 31 March 2026 (31 December 2025: EUR 12.9 billion). The return on equity came to 21.2% (16.1%) and thus clearly surpassed the strategic target of more than 14%.

“Hannover Re is very robustly positioned – underpinned by our consistent risk and capital management,” said Chief Financial Officer Christian Hermelingmeier. “This is evident from the further increase in the resilience reserves in 2025 to the level of EUR 3.2 billion. The strong capital adequacy ratio similarly underscores our financial stability. Given the good quality of the business written, we again see potential scope in the current year to further boost our financial resilience, provided there are no distortions on the capital market or particularly sizeable large losses.”

The contractual service margin (net), which quantifies the unearned profit expected from the business written, grew by 9.7% to EUR 8.7 billion (31 December 2025: EUR 7.9 billion). The risk adjustment for non-financial risk increased to EUR 3.9 billion (31 December 2025: EUR 3.7 billion).

The capital adequacy ratio under Solvency II, which measures Hannover Re’s risk-carrying capacity, stood at 254% at the end of March (31 December 2025: 256%). It allows for the foreseeable dividend for 2026 on a pro-rata basis as well as the planned business growth in 2026 and thus remains comfortably above the threshold of more than 200%.

Large losses in property and casualty reinsurance below budgeted expectation at EUR 206.9 million

The treaty renewals in property and casualty reinsurance as at 1 January 2026 saw an increase of 3.3% in premium volume with an inflation- and risk-adjusted price decline for the renewed business of 3.2%. This development is reflected in the new business CSM (net), which decreased in the first quarter of 2026 by 26.8% to EUR 1.1 billion (EUR 1.5 billion), among other things due to exchange rate effects.

Reinsurance revenue (gross) in property and casualty reinsurance reached EUR 4.5 billion (EUR 5.1 billion). The revenue decline was attributable to the previously described differing developments within property and casualty reinsurance: while the volume in structured reinsurance declined, traditional reinsurance grew by 2.1% adjusted for exchange rate effects.

Payments for large losses amounted to EUR 206.9 million and thus came in below the large loss budget for the first quarter of EUR 480.3 million. As usual, the entire large loss budget was booked and taken as the basis for calculating the quarterly result. Given that it is still too early to reliably estimate the further economic fallout of the Iran war, Hannover Re anticipates that the remaining first-quarter budget for large losses will comfortably suffice to cover any loss expenditures that may potentially have occurred up to that point. So far, however, only a minimal number of concrete notifications have been received.

The largest payments (net) for individual losses were attributable to Winter Storm Fern in the United States and Canada at the start of the year in an amount of EUR 124.8 million as well as the Atlantic windstorms Kristin and Leonardo, which similarly caused loss expenditures of EUR 34.0 million on the Iberian Peninsula and in Morocco as the year got underway.

The reinsurance service result (net) increased substantially overall to EUR 636.0 million (EUR 271.6 million). The combined ratio improved to 83.6% (93.9%) and was thus better than the full-year target of less than 87%. Adjusted for exchange rate effects, the reinsurance finance result (net) amounted to EUR -312.2 million (EUR -282.8 million).

The operating profit (EBIT) improved by 72.9% to EUR 767.2 million (EUR 443.7 million).

Life and health reinsurance develops favourably as anticipated

All segments of life and health reinsurance experienced sustained demand, even though business was marked by intense competition worldwide.

The new CSM generation (net), comprised of new business (net) and contract extensions (net), grew to EUR 248.6 million (EUR 231.7 million). The contractual service margin (net) increased by 3.0% as at the end of March to EUR 6.5 billion (31 December 2025: EUR 6.3 billion).

Reinsurance revenue (gross) grew to EUR 2.0 billion (EUR 1.9 billion). An increase of 15.0% would have been recorded at unchanged exchange rates.

The reinsurance service result (net) climbed as expected to EUR 254.2 million (EUR 243.2 million) and is thus on track to reach the full-year target of around EUR 925 million. The included new business LC (net) amounted to EUR 4.1 million (EUR 8.3 million). Adjusted for exchange rate effects, the reinsurance finance result (net) stood at EUR -47.9 million (EUR -50.5 million).

The operating result (EBIT) for life and health reinsurance reached EUR 204.1 million (EUR 253.0 million), falling short of the previous year’s level due to exchange rate effects and reduced contributions from investment income.

Annualised return on investment of 3.6% above the full-year target of around 3.5%

The portfolio of assets under own management was on a higher level than at the end of the previous year at EUR 68.3 billion (31 December 2025: EUR 66.3 billion). The portfolio was boosted by a positive operating cash flow and currency effects, which offset valuation declines by a comfortable margin.

Investment income amounted to EUR 605.3 million (EUR 576.9 million). The annualised return on investment reached 3.6%, leaving Hannover Re well placed to achieve the full-year target of around 3.5%.

Guidance: Full-year targets for 2026 confirmed

Hannover Re anticipates Group net income of at least EUR 2.7 billion for the 2026 financial year.

“Even though price pressures still have the upper hand in property and casualty reinsurance, our superb positioning enabled us to significantly expand our book of business – especially in the 1 April renewals – in areas where our profitability requirements were met,” said Clemens Jungsthöfel. “Against this backdrop, we remain committed to our disciplined underwriting approach, prioritise the quality of our portfolio and focus on business that generates sustainable profits.”

Hannover Re traditionally renews business in the Asia-Pacific region and North America as well as in some specialty lines as at 1 April. The treaty negotiations here resulted in stable or slightly softer conditions at continued adequate prices. The premium volume increased by altogether 18.8%, with an inflation- and risk-adjusted price decline of 3.6% recorded for the renewed business.

In property and casualty reinsurance, growth in reinsurance revenue (gross) in traditional business (excluding structured reinsurance) is expected to be in the mid-single-digit percentage range based on constant exchange rates. Hannover Re also expects a combined ratio of less than 87%.

In life and health reinsurance, Hannover Re anticipates a reinsurance service result (net) of around EUR 925 million.

The return on investment is projected to reach around 3.5%.

Achievement of the earnings guidance for 2026 is based on the premise that large loss expenditure does not significantly exceed the budgeted level of EUR 2.3 billion and assumes that there are no unforeseen distortions on capital markets.

In accordance with Hannover Re’s dividend policy, it is envisaged that the payout ratio for the regular dividend will be around 55% of IFRS Group net income. Furthermore, the goal is to distribute a dividend per share at least on the level of the previous year and to increase it over the long term.

Hannover Re one of the world's leading reinsurers. We transact all lines of property & casualty and life & health reinsurance and are present worldwide with around 4,000 staff. Property and casualty reinsurance in Germany 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 very good financial strength ratings: Standard & Poor’s AA- "Very Strong" and A.M. Best A+ "Superior".

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