Hannover Re reports surge in net income

Reinsurance revenue nearly met the firm's growth target

Hannover Re reports surge in net income


By Kenneth Araullo

Hannover Re has announced its fiscal results for 2023, highlighting a surge in its group net income.

The group reported earnings of €1.8 billion, surpassing its initial forecast of at least €1.7 billion. This financial upswing prompts an anticipated increase in dividends, with plans to propose a total distribution of €7.20 per share at the next Annual General Meeting — a hike from the previous €6.00, comprising a regular dividend of €6.00 and a special dividend of €1.20 per share.

The company’s reinsurance revenue saw an increase to €24.5 billion from €24.0 billion, with a 4.9% growth rate at constant exchange rates, nearly meeting the 5% growth target. The reinsurance service result climbed to €1.7 billion, marking a 24.1% increase. However, the adjusted reinsurance finance result experienced a decline.

Hannover Re’s operating result also saw a jump, reaching €2.0 billion. Low tax expense contributed to the financial year’s outcome, primarily due to a one-time tax effect related to the implementation of global minimum taxation.

The firm’s shareholders’ equity stood at €10.1 billion by year-end, with a return on equity of 19.0%, surpassing the target by a significant margin. The solvency coverage ratio remained well above the minimum requirement.

In property and casualty reinsurance, Hannover Re achieved better risk-adjusted prices and conditions, contributing to a substantial 30% increase in new business. Despite a series of mid-sized catastrophe losses, the company managed to maintain a stable performance, with its combined ratio improving slightly.

The life and health reinsurance sectors also exceeded expectations, driven by sustained demand and significant new business in financial solutions and longevity covers. The operating result in this segment showed considerable growth, benefiting from favorable business development across various regions.

Jean-Jacques Henchoz, CEO of Hannover Re, highlighted the company’s strong performance in 2023, crediting its success to the solid execution in both business groups and investment strategies.

“Despite the continued challenging environment, we have further improved the profitability of our business and cemented our role as a reliable partner and robustly capitalized reinsurer,” Henchoz said.

Looking ahead to 2024, Henchoz expressed confidence in achieving the company’s goals, underpinned by strong treaty renewals and enhanced resilience.

Hannover Re anticipates a minimum of 5% growth in reinsurance revenue, with property and casualty reinsurance expected to see higher growth rates than life and health reinsurance. The company forecasts a group net income of at least €2.1 billion for the year, with an investment return target of at least 2.8%.

The outlook remains positive, contingent on stable market conditions and large loss expenditure within the projected range. Hannover Re also plans to increase its ordinary dividend over the 2024-2026 strategy cycle, supplemented by a special dividend subject to exceeding capital requirements and profit targets.

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