Hannover Re sees book grow 7.6% at Jan 1 as 2024 net income reaches €2.3bn

Large European reinsurer Hannover Re has reported an increase in premium income in traditional property and casualty reinsurance by 7.6% at the 1 January 2025 treaty renewals, while its net income increased to €2.3 billion in the 2024 financial year.

“The good quality of the renewed business was maintained, while an average inflation- and risk-adjusted price decline of 2.1% was recorded,” the firm said in a new update.

Hannover Re explained that treaties with a premium volume of €10.3 billion were due to be renewed on 1 January 2025. This corresponds to 59% of traditional property and casualty reinsurance business (excluding facultative reinsurance, ILS business, and structured reinsurance).

The reinsurer reportedly renewed treaties with a premium volume of €9.304 billion, while treaties worth €950 million were cancelled.

“Together with €1.734 billion from new treaties and from changes in prices and treaty shares, the total renewed premium volume grew by 7.6% to €11.038 billion. Overall, prices were stable or slightly down,” Hannover Re observed.

Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re, commented, “We can look back on successful renewals in a market that remains attractive. This enabled us to generate further profitable growth in our book of business.

“Demand for high-quality reinsurance capacities was once again higher than in the previous year. Thanks to our very healthy capitalisation, we were able to offer our clients more reinsurance protection at appropriate conditions.”

Sven Althoff, the member of Hannover Re’s Executive Board responsible for property and casualty reinsurance, added, “Reinsurance prices are still on a level commensurate with the risks, although loss-free treaties, in particular, saw increased competition, leading to price reductions in especially competitive lines.

“At the same time, however, conditions and retentions remained extensively unchanged. Most notably, the good quality of our portfolio coupled with sustained strong demand gives us confidence as we look ahead to further renewals during the year.

“Adequate prices and conditions continue to be indispensable for sustainable reinsurance protection. This is all the more true given that climate change and associated extreme weather events remain one of our greatest challenges. The wildfires around Los Angeles have underscored this once again.”

Looking by region, Hannover Re’s premium volume grew by 9.7% in Europe, the Middle East, and Africa, despite rate erosion from increased reinsurance capacity. The Americas saw a 13.5% increase, with key renewals due in mid-2025; the U.S. property market remained attractive despite pricing pressure, while liability risks saw price improvements. In Asia-Pacific, premium growth was a modest 0.8% amid intense competition, particularly in Southeast Asia and China.

Hannover Re continued, “With sustained strong demand for solutions offering capital relief, Hannover Re benefits from its leading market position in structured reinsurance. An above-average, double-digit growth rate is therefore anticipated for 2025.

“Hannover Re slightly extended its strong market position in natural catastrophe business on the back of a continued adequate price level and stable conditions.

“The risk-adjusted price decline in this segment amounted to 5.4%, with erosion most striking in US business. The retentions carried by ceding companies nevertheless remained on a stable level and were in some cases further increased under loss-impacted business.”

Providing preliminary figures for 2024, Hannover Re also noted that it generated reinsurance revenue of €26.4 billion, up from €24.5 billion in 2023.

The operating profit (EBIT) amounted to €3.3 billion, with property and casualty reinsurance contributing €2.4 billion and life and health reinsurance accounting for €934 million.

As mentioned, the firm’s net income increased to EUR 2.3 billion in 2024, up from €1.8 billion in 2023.

Jean-Jacques Henchoz concluded, “Looking ahead to our targets for 2025, the successful renewals in January give me grounds for optimism. Growth in traditional business as well as the double-digit increase in structured reinsurance will be pivotal to achieving our growth target for 2025.

“We already recorded the first significant large loss event shortly after the start of the year with the California wildfires. We therefore continue to place considerable emphasis on our prudent underwriting policy and our risk management.”

As clarified in November, Hannover Re anticipates a net income of around €2.4 billion for the 2025 financial year.

Adjusted for exchange rate effects, the growth in reinsurance revenue in property and casualty reinsurance is projected to be more than 7%.

Hannover Re expects the combined ratio in the Property & Casualty reinsurance business group to be under 88% in 2025 owing to the improved market environment.

It is worth noting that the firm’s earnings guidance for 2025 is based on the premise that large loss expenditure does not significantly exceed the budgeted amount of €2.1 billion, which is up from €1.825 billion in 2024, and assumes that there are no unforeseen distortions on capital markets.

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