Hannover Re has raised its 2024 profit target after net income rose 30.4% to €1.8 bn for 9M 2024, driven by a 36% jump in the reinsurance service result to €2.1 bn.
Gross reinsurance revenue grew 6.4% to €19.7 bn, compared to €18.5 bn a year earlier. Adjusted for exchange rates, growth would have been 7%.
The net reinsurance service result, reflecting underwriting profitability after ceded business adjustments, rose from €1.6 bn, while the reinsurance finance result, still negative, worsened to -€784 mn from -€602 mn in 2023.
Operating profit increased by 33.3% to €2.4 bn, and net income hit €1.8 bn, boosted by a one-off €120 mn tax gain.
In its property and casualty (P&C) reinsurance division, Hannover Re saw stable or improved prices and conditions in the 2024 renewals. The company capitalized on growth opportunities, increasing its net new business CSM by 14.1% to €2.5 bn from €2.2 bn.
P&C revenue rose 9.4% to €13.9 bn, and the segment’s service result surged 65.2% to €1.46 bn, with a stronger combined ratio of 87.9% despite natural disaster impacts.
Large loss expenditure reached €1.3 bn, under the €1.4 bn budget. Major losses included €225 mn from flooding in Central and Eastern Europe, €130 mn from hurricane Helene, and €121 mn from flooding in Dubai.
Hannover Re also allocated €100 mn for potential payouts related to the Baltimore bridge collapse.
The net P&C reinsurance finance result worsened to -€666 mn from €473 mn. However, the P&C investment result improved 20.8% to €1.146 bn, and operating profit in the segment climbed 56.8% to €1.737 bn.
In life and health (L&H) reinsurance, the new business CSM slightly decreased to €223 mn from €228 mn. Contract renewals and in-force portfolio amendments boosted the contractual service margin by €293 mn.
L&H revenue remained flat at €5.8 bn, and the reinsurance service result dipped to €668 mn from €677 mn. The L&H investment result contracted to €298 mn, with EBIT down 1.9% to €716 mn.
Hannover Re CEO Jean-Jacques Henchoz highlighted the company’s strong trajectory and earnings potential, noting the continued risks from hurricane season.
The destruction left behind by Hurricanes Helene and Milton serves as a reminder that hurricane season is not yet over. Nevertheless, we are still very much on the right track and feel optimally positioned for the remaining months, and we are therefore raising our full-year profit target
Jean-Jacques Henchoz, Chief Executive Officer
Hannover Re has raised its full-year profit target to €2.3 bn, up from the prior guidance of €2.1 bn, assuming stable capital markets and manageable large loss expenditures of €1.825 bn.
The company projects reinsurance revenue growth of over 5% and expects a combined ratio below 89% for P&C reinsurance and a service result exceeding €850 mn in L&H reinsurance.
