Hannover Re reports prices down 2.1% at 1/1 renewal

Hannover Re recorded an average 2.1% drop in reinsurance prices at 1 Jan renewals, inflation and risk adjusted, but saw premium volumes increase by 7.6% to €11.04bn. The reinsurer said “overall, prices were stable or slightly down” but are “still on a level commensurate with the risks”. Hannover Re also confirmed that it achieved an increased earnings target in 2024 with a group net income of €2.3bn, based on preliminary unaudited financials, while the group’s operating profit jumped by 67.5% in 2024 to €3.3bn, boosted by property and casualty (P&C), which more than doubled its contribution to €2.4bn from €1.1bn. Sven Althoff, Hannover Re’s executive board member responsible for P&C, said loss-free treaties at 1 Jan renewals attracted more competition, “leading to price reductions in especially competitive lines”. But he said conditions and retentions “remained exclusively 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,” Althoff said. Jacques Henchoz, CEO at Hannover Re, said the 1 Jan renewals were successful “in a market that remains attractive”. He added: “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.” Hannover Re said treaties with a premium volume of €10.3bn were up for renewal at 1 Jan, about 59% of its P&C reinsurance book. Although it cancelled €950m worth of treaties, Hannover Re said €1.73bn in new treaties, together with changes in prices, saw overall growth in the first renewal of the year. Premium volume in Europe, the Middle East and Africa increased by 9.7%, Hannover Re said, although it noted higher levels of capacity led to some rate erosion in the region, while conditions remained good. In its home market of Germany, Hannover Re increased premium volume on the back of “attractive” risk-adjusted prices. Premiums from the Americas were up by 13.5%, although large parts of this portfolio come up for renewal on 1 June and 1 July 2025. “The property insurance market in the US remains attractive despite appreciable pricing pressure, while in the liability segment, risk-adjusted price improvements were possible,” Hannover Re said, adding that the LA wildfires “will likely have a significant impact on property insurance renewals during the year”. The reinsurer’s operations in Asia Pacific grew by a modest 0.8% with intense competition, especially in Southeast Asia and China, although it said opportunities for growth at adequate prices opened up in some markets, including Indonesia, Singapore and Vietnam. The group confirmed profit guidance of €2.4bn in 2025. “Looking ahead to our targets for 2025, the successful renewals in January give me grounds for optimism,” said Henchoz. “Growth in traditional business, as well as the double-digit increase in structured reinsurance, will be pivotal to achieving our growth target for 2025.” Commenting on the LA wildfires, Henchoz said: “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.”

Hannover Re reports prices down 2.1% at 1/1 renewal

The reinsurer said it expects to record a 68% jump in operating profit for 2024

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