Hannover Re posts 13% rise in net income as Group revenue hits €13.3bn in H1’25

European reinsurer Hannover Re has reported a 3.3% rise in gross reinsurance revenue to €13.3 billion for the first half of 2025, with solid revenue growth in property and casualty (P&C) more than offsetting a slight contraction in life and health (L&H), despite high catastrophe losses in the period.

Group-wide, Hannover Re’s revenue growth would have been even stronger at 4.3% at unchanged exchange rates. The net reinsurance service result was flat year-on-year at €1.4 billion, as operating profit grew 6.3% to €1.8 billion, and net income for the Group rose 13.2% to €1.3 billion.

The company’s return on equity of 23% for H1’25 is “comfortably” above strategic target, while shareholders’ equity amounted to €11.1 billion at June 30th, 2025, compared with €11.8 billion at the end of 2024.

Both the P&C and L&H reinsurance operations performed well in the six month period. Within P&C, the firm notes that the January 1 renewal period led to premium growth with largely stable conditions, with the April renewals passing with “stable or slightly softer conditions” although the pricing level remained attractive to the carrier.

The P&C net new business CSM increased 7% year-on-year to €1.99 billion in H1’25, and the net new business LC totalled €29.6 million, compared with €15.7 million in H1’24.

Gross P&C reinsurance revenue grew 4.8% to €9.5 billion compared with €9.1 billion last year, and would have increased by 6% at unchanged exchange rates.

P&C large losses totalled €976.1 million in the first six months of 2025, a considerable increase on the prior year’s €566.5 million, driven by the Los Angeles, California wildfires in January at a cost of €615.1 million. Other notable losses in the period include the fire at an oil refinery in the US state of Texas at €76 million, the Myanmar earthquake at €59 million, and an extensive series of tornadoes in the US Midwest at a cost of €50 million. All in all, large loss costs exceeded Hannover Re’s budgeted expectation of €935 million for the first six months.

Hannover Re also strengthened its P&C reserves in H1’25, explaining that the resilience in the loss reserves, which an external study put at €2.5 billion effective December 31st, 2024, was further strengthened in H1’25.

The net P&C reinsurance service result increased by over 1% year-on-year to €975.1 million in H1’25. The P&C combined ratio increased to 88.4% from 87.8%, so came in slightly higher than the expected full-year figure of less than 88%.

Within P&C reinsurance, operating profit increased 11.6% to €1.3 billion, compared with €1.2 billion last year.

The result in L&H reinsurance in the first six months of 2025 was in line with expectations, says Hannover Re, driven by the favourable development of business with longevity covers and financial solutions.

The L&H net new business CSM increased 17% year-on-year to €216.6 million in H1’25, as the net loss component increased to €16.3 million from €9.9 million. The reinsurer also reports that L&H contract renewals and amendments in the in-force portfolio totalled €148.1 million, down from €201.3 million, as the net contractual service margin changed by -2.9% to €6.3 billion, compared with €6.5 billion at the end of 2024.

Within L&H reinsurance, gross revenue fell slightly to €3.8 billion from €3.82 billion, but the reinsurer notes that growth would have been 0.3% at unchanged exchange rates. The net reinsurance service result declined slightly to €444.5 million from €448.1 million, and the operating result fell 6.3% year-on-year to €469.9 million.

In terms of investments, Hannover Re has today reported that its portfolio contracted to €62.6 billion from €65.9 billion at the end of 2024, driven mainly by revaluation effects associated with investments held in US dollars. The investment result hit €1 billion, unchanged from the prior year, as the annualised return on investment reached 3.3% and so is well on track for achieving the full-year target of at least 3.2%.

Clemens Jungsthöfel, Chief Executive Officer of Hannover Re, said: “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. 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.”

Christian Hermelingmeier, Chief Financial Officer of Hannover Re, commented: “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. This measure not only prepares us better for future loss events, but also enables us to continue to minimise earnings volatility in the future.”

“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. 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,” added Jungsthöfel.

At the mid-year P&C renewals, Hannover Re saw modest price declines, a period when parts of the firm’s North American portfolio, especially natural catastrophe risks, and business from Australia and New Zealand, and in the credit and surety lines are traditionally renewed. All in all, the volume of business fell by 2.1%, driven by the reduction of a large contract. Absent this, Hannover Re says that growth of 4.5% would have been booked. The inflation and risk-adjusted price change for the renewed business was -2.9%.

Looking ahead, Hannover Re expects gross P&C reinsurance revenue to grow by more than 7% in 2025, adjusted for exchange rate effects, with a combined ratio of less than 88%.

In L&H reinsurance, the firm expects a net reinsurance service result of more than €875 million, and expects the net contractual service margin to grow by around 2%.

The return on investment for the year should reach at least 3.2%, projects Hannover Re.

These predictions for the full year assumes that there are no unforeseen distortions on capital markets and that large loss expenditure does not significantly exceed the expected level of €2.1 billion for the carrier.