Hannover Re, a German reinsurance company, reported a 2.3% increase in prices, adjusted for inflation and risk, on its renewed business during the treaty reinsurance renewals on January 1, 2024, within the traditional property and casualty (P&C) reinsurance sector.
Hannover Re noted a more stable market environment for these renewals compared to the previous year, alongside an increase in demand for reinsurance capacity, mainly from existing market participants.
Jean-Jacques Henchoz, Hannover Re’s Chief Executive Officer, commented on the renewals, stating satisfaction with the results. He highlighted the adjustments made in rates across various lines and regions in response to the losses experienced in 2023, the persistent high inflation, and geopolitical uncertainties.
Henchoz emphasized the company’s continued improvement in the quality of its business portfolio, positioning Hannover Re to address future challenges effectively.
Hannover Re experienced more growth in non-proportional reinsurance book during these renewals, with a 10.6% increase in premium volume to €3,178 million and a 4.4% risk-adjusted price increase.
For the January 1, 2024 renewals, Hannover Re had treaties with a total premium volume of €9,552 million, representing 62% of its traditional P&C reinsurance business.
The company renewed €8,671 million of this volume, with €881 million either cancelled or modified. The renewal process, which also included new treaties and adjustments in prices and treaty shares, resulted in a 6.9% increase in total renewed premium volume, reaching €10,212 million.
The proportional reinsurance segment saw a 5.3% growth to €7,034 million, with a 1.3% price increase after risk adjustment.
Sven Althoff, a member of Hannover Re’s Executive Board responsible for P&C reinsurance, remarked on the strong demand for the company’s reinsurance protection. He noted the profitable growth achieved in the diversified portfolio, particularly in non-proportional reinsurance.
Althoff also mentioned attractive growth opportunities in structured reinsurance and insurance-linked securities, contributing to further enhancements in the quality of the business portfolio.
In the Europe, Middle East, and Africa region, despite a year marked by significant losses, Hannover Re’s premium volume grew by 6.5%.
In the Americas, the renewal process led to a 2.2% increase in premium volume, with the anticipation of further negotiations in the June and July renewals. However, in the Asia-Pacific region, the company reduced its premium volume by 10.1%, even as markets remained stable, particularly in Southeast Asia, Korea, and the Greater China region.
The natural catastrophe business segment saw high single-digit percentage growth in premium volume during the January 1, 2024 renewals. This segment experienced significantly higher prices and improvements in coverage structures, especially for programmes impacted by losses.
Hannover Re reported preliminary, unaudited financial results for the 2023 fiscal year, with a P&C reinsurance operating result of €1.1 billion, up from €0.87 billion the previous year.
The company’s operating result (EBIT) for the financial year 2023 was €1.97 billion, compared to €1.52 billion a year earlier, and the group net income increased to €1.8 billion, meeting its annual profit target of at least €1.7 billion. Reinsurance revenue rose to €24.4 billion from €24.1 billion.
Henchoz expressed confidence in the company’s improved profitability and resilience, positioning Hannover Re to achieve its financial goals for the 2024 fiscal year. The audited annual financial statement is scheduled for release on March 18, 2024.
by Yana Keller
