Hannover Re publishes Q1 2024 results

Quarter "rather benign" with regards to large losses, CEO explains

Hannover Re publishes Q1 2024 results


By Kenneth Araullo

Hannover Re has announced a 15% increase in group net income for the first quarter of 2024, totaling €558 million, aligning with the company’s guidance for the full financial year.

The company reported 1.6% growth in reinsurance revenue, reaching €6.7 billion, up from €6.6 billion the previous year. The reinsurance service result saw a significant increase of 27% to €720 million. The operating profit (EBIT) also rose by 13% to €811 million. Earnings per share increased from €4.02 to €4.63.

As per its financials, Hannover Re’s shareholders’ equity stood at €10.9 billion as of March 31, 2024, with an annualized return on equity of 21.3%. The capital adequacy ratio under Solvency II was reported at 266.8%, well above the target of 200%.

In the property and casualty reinsurance segment, expenditures for catastrophe losses were below expectations, helping maintain a comfortable budget. Renewal season saw improvements in risk-adjusted prices and conditions, contributing to a gross reinsurance revenue increase of 3.1% to €4.7 billion. The combined ratio improved significantly to 88.0%.

In life and health reinsurance, Hannover Re continued to meet expectations with strong demand in financial solutions and longevity risk protection. The reinsurance service result for this segment contracted to €211 million but remained at a satisfactory level for achieving the annual target.

Total investment income was €498 million, driven by strong returns from the fixed-income portfolio. The overall return on investment was 3.3%, surpassing the full-year target of at least 2.8%.

Hannover Re – outlook for 2024

Looking ahead to the rest of 2024, Hannover Re expects reinsurance revenue to grow by more than 5% based on constant exchange rates, with stronger growth anticipated in property and casualty reinsurance than in life and health.

The company forecasts a group net income of at least €2.1 billion, assuming no unforeseen market distortions and large loss expenditures within budget.

Jean-Jacques Henchoz, chief executive officer of Hannover Re, commented on the quarter’s performance.

“We can look back on a rather benign quarter as regards large losses. We had a good start into the year, putting us on track to achieve our full-year profit target,” he said. “At the same time, with the recent treaty renewals, we have put in place a solid foundation for further profitable growth given the continued demand for high-quality and reliable risk protection in what is a challenging landscape.”

"The 1 April renewals provided further confirmation that the market environment has stabilized on a high level after the substantial improvements in prices and conditions recorded in prior years,” Henchoz said. “We are optimistic that this level can be sustained in the coming renewals as well. It remains the case that our clients value our quality as a strong partner and our focus on our core expertise, namely reinsurance.”

Hannover Re also expects continued moderate growth in its asset portfolios and aims for a return on investment of at least 2.8%.

The company anticipates an increase in the ordinary dividend over the 2024-2026 strategy cycle, supplemented by a special dividend if capitalization and profit targets exceed expectations.

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