Continued profitable growth for Hannover Re amid evolving risk landscape: CEO Jungsthöfel

Clemens Jungsthöfel, who took over as CEO of Hannover Re from Jean-Jacques Henchoz in early April, has outlined his vision for the company’s future in a recent interview with Börsen-Zeitung, emphasizing continued profitable growth by leveraging its focused reinsurance model a lean structure.

Jungsthöfel described Hannover Re’s current position as “exceptionally strong” as it embarks on its next strategic cycle.

Addressing the escalating trend of severe and frequent natural catastrophes driven by climate change, the executive acknowledged the rising large loss budgets within the industry. However, he is confident that this increase is being effectively managed through contract renewals and pricing adjustments.

“We still manage to control the stronger burden from natural catastrophes, partly through our diversification and our own retrocession reinsurance. Therefore, we are also satisfied with the general development of the combined loss ratio. Q1 2025 was an outlier. The large loss burden is still well within our annual budget,” Jungsthöfel stated.

When questioned about the declining price trend, the CEO expressed no concern, stating: “In recent renewal rounds on January 1 and April 1, we saw slight price erosion. This is also a consequence of more capacity in the market.

“But this coincides with higher demand in many areas. Looking back 10 to 15 years, casualty reinsurance still operates in a very attractive market environment with appropriate rates across the entire book.”

Despite industry experts suggesting the peak pricing environment of 2024 has passed, Jungsthöfel remains optimistic about pricing adequacy. He anticipates significant price increases in regions heavily impacted by recent losses, such as California.

Even with some recent price erosion, like in Japan, he noted the persistence of “very good margins”. He also stated that “the significant improvement in contract terms in 2023 and increased deductibles by our customers were pleasing and important for the reinsurance industry.”

As the new CEO, Jungsthöfel underscored the continuity of Hannover Re’s strategic direction. The company’s current three-year strategic cycle aims for Hannover Re to remain an industry leader in terms of profitability and earnings growth, ensure sustainable economic value creation, and offer an attractive, steadily rising base dividend by 2026.

“We are well on track to achieve these targets because we are focused on our core business: reinsurance. We intend to remain committed to this focus and to our „somewhat different“ culture. Personally, I continue to see myself as part of a team – as I have in past years. Continuity will remain a hallmark of Hannover Re’s trajectory,” he stated.

Adding: “We will begin our planning for that this year. Regarding our business model and the „somewhat different“-approach, we will stay the course. We will look at areas where there are attractive growth opportunities. We can rely on a rock-solid balance sheet and a strong capital base. We are in an excellent position to pursue further growth.”

Looking ahead, Jungsthöfel identified some key areas for growth. In property and casualty reinsurance, he sees growth potential in markets where Hannover Re has already built a strong position over recent years.

Structured reinsurance will also be a growth area, the CEO added, as are longevity and financial solutions within life and health reinsurance.

“If we want to keep growing after doubling our P&C reinsurance premium income over the past five years, we must increasingly ensure that we remain efficient and agile,” he added.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.