Hannover Re grows 7.6% at 1.1 as pricing dips 2.1%
(The Insurer) - Hannover Re has reported premium growth of 7.6 percent at the 1 January renewals with risk-adjusted pricing down 2.1 percent across its portfolio.
Hannover Re reports 7.6% premium growth at 1 January renewals
FY 2024 profit of €2.3bn aligns with guidance
2025 profit target confirmed at €2.4bn
The reinsurer had treaties with a total premium volume of €10.3bn ($10.7bn) – representing 59 percent of its traditional P&C reinsurance portfolio – up for renewal at 1.1.
Hannover Re said it renewed €9.3bn of this business, with €950mn of premiums non-renewed.
New treaties and changes to prices and treaty shares added a further €1.7bn, giving a total premium volume of €11.0bn written at 1.1.
In Europe, the Middle East and Africa, Hannover Re said its premium volume was up 9.7 percent, with the reinsurer reporting attractive risk-adjusted pricing in Germany, as well as significant rate improvements for loss-affected business in the Middle East and Turkey.
Premium volume was up 13.5 percent for business in the Americas renewing at 1.1, with Hannover Re reporting substantial premium growth in business with insurtechs.
With much of the regional portfolio due to renew at 1 June and 1 July, Hannover Re said January’s Los Angeles wildfires will likely have a significant impact on property renewals throughout the year.
Asia Pacific premium volume grew by a more modest 0.8 percent amid intense competition, although Hannover Re reported opportunities for growth in markets such as Indonesia, Singapore and Vietnam.
Across different classes of business, the picture was mixed with volume growth of 4.5 percent in credit, surety and political risks contrasting with a 6.2 percent contraction in aviation and marine reinsurance.
Hannover Re said it was able to further enlarge its market share in the aviation sector, but surplus capacity in marine business resulted in moderate price declines despite significant large loss expenditure.
The reinsurer said it “slightly extended its strong market position” in natural catastrophe business on the back of a continued adequate price level and stable conditions. Risk-adjusted pricing was down 5.4 percent for nat cat business, with erosion most striking in US business.
However, retentions carried by ceding companies remained stable and in some cases further increased for loss-affected treaties.
Agricultural premium volume declined by 9.2 percent, driven in part by a planned reduction in business in China.
Outside its treaty portfolio, Hannover Re said facultative reinsurance renewals were stable albeit with risk-adjusted pricing retreating from its previous high level. The reinsurer said it had maintained its leading position in structured reinsurance, where it expects a double-digit growth rate in 2025.
Sven Althoff, the member of Hannover Re's executive board responsible for P&C reinsurance, said reinsurance prices overall at 1.1 were still on a level commensurate with the risks
“Loss-free treaties, in particular, saw increased competition, leading to price reductions in especially competitive lines,” he said.
“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.”
Hannover Re CEO Jean-Jacques Henchoz said: "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."
FY profits meet guidance
The reinsurer has also announced preliminary unaudited results for 2024, reporting a full-year group profit of €2.3bn.
This was in line with updated guidance issued in December.
Hannover Re said its total reinsurance revenue rose to €26.4bn in 2024, up from €24.5bn in 2023. Operating profit of €3.3bn included a €2.4bn P&C reinsurance contribution.
The group also confirmed its 2025 net income target of €2.4bn, issued in December. Hannover Re said it expects its P&C reinsurance combined ratio to be under 88 percent in 2025, assuming large losses do not significantly exceed the budgeted €2.1bn.
Hannover Re is set to publish its audited full-year results on 13 March.
