Hannover Re net profit rises 6.9% to €2.1 bn, combined ratio improves

Hannover Re reported a 6.9% increase in Group net income to €2.1 bn for the first nine months of 2026, supported by improved property and casualty reinsurance profitability and higher investment income.

Operating profit rose 16.5% to €2.9 bn, while gross reinsurance revenue declined slightly to €19.5 bn from €19.7 bn. At constant exchange rates, revenue would have increased by 1.1%.

The reinsurer maintained its full-year net income guidance of at least €2.7 bn despite declining prices in parts of the reinsurance market, currency movements and higher large-loss payments.

• Group net income increased 6.9% to €2.1 bn, with operating profit up 16.5% to €2.9 bn and earnings per share rising to €17.42.
• Property and casualty reinsurance operating profit grew 20.2% to €2.2 bn, supported by improved underwriting results despite €1.32 bn in large losses.
• Hannover Re confirmed its 2026 net income target of at least €2.7 bn, a combined ratio below 87% and an investment return of approximately 3.5%.

Hannover Re’s property and casualty combined ratio improved to 83.7% from 86.0%, while annualized investment returns reached 3.7%, exceeding the company’s full-year target.

Hannover Re earnings and profitability improve in nine months

Hannover Re’s net reinsurance service result increased to €2.6 bn from €2.4 bn, supported by improved performance across its underwriting portfolio.

The net reinsurance finance result, adjusted for currency effects, amounted to a loss of €1.1 bn, compared with €1.0 bn a year earlier. The structurally negative result reflects the unwinding of discounting applied to insurance liabilities in previous reporting periods.

Currency movements also affected earnings. The foreign exchange result shifted to a €91.3 mn loss from a €216.5 mn gain in the previous year, reflecting changes in the US dollar’s exchange rate.

Other income and expenses improved to a negative €333.8 mn from a negative €442.2 mn. Earnings per share increased to €17.42 from €16.29.

Hannover Re’s net reinsurance service result increased by approximately €200 mn, contributing to higher operating earnings despite adverse foreign exchange effects.

Chief Executive Clemens Jungsthöfel said the company’s underwriting discipline and operating structure had supported profitable growth in a challenging market.

“Our consistent focus on disciplined underwriting and our lean operating model enable us to grow profitably across all market phases, particularly in property and casualty reinsurance,” Jungsthöfel said.

The reinsurer’s shareholders’ equity increased to €13.7 bn at September 30, compared with €12.9 bn at the end of 2025.

Book value per share rose to €113.34 from €107.21, while annualized return on equity was 21.1%, compared with 22.0% in the previous year.

Property and casualty reinsurance combined ratio falls to 83.7%

Hannover Re improved underwriting profitability in property and casualty reinsurance despite softer pricing, currency headwinds and higher reported large losses.

Gross P&C reinsurance revenue decreased 4.9% to €13.2 bn from €13.9 bn. At constant exchange rates, the decline would have been 2.4%.

The company nevertheless increased profitable business volumes during treaty renewals, partially offsetting the effects of lower rates. The net reinsurance service result increased to €1.9 bn from €1.7 bn, while operating profit rose 20.2% to €2.2 bn.

The P&C combined ratio improved by 2.3 percentage points to 83.7%, remaining below Hannover Re’s full-year expectation of less than 87%.

New business contractual service margin declined 11.9% to €2.3 bn from €2.6 bn, reflecting the changed market environment.

Hannover Re maintained its emphasis on underwriting profitability rather than pursuing premium growth at the expense of pricing adequacy.

The company’s nine-month result also benefited from its established approach to large-loss budgeting, under which the full allocated loss budget is recognized even when actual claims are lower.

Large catastrophe losses reach €1.32 bn

Hannover Re recorded €1.32 bn in large-loss payments during the first nine months of 2026, compared with €1.18 bn a year earlier. The amount remained below the €1.79 bn large-loss budget allocated for the reporting period.

Hannover Re nevertheless recognized the entire nine-month budget when calculating its results, consistent with its standard reserving practice.

Actual large-loss payments were approximately €470 mn below the budgeted amount, while the company’s full-year large-loss allowance remained €2.3 bn.

The largest individual catastrophe losses included the August earthquake in Colombia, which cost the reinsurer €215.7 mn.

Severe Atlantic windstorms affecting the Iberian Peninsula and Morocco early in the year generated losses of €135.5 mn.

Winter Storm Fern in the United States and Canada produced additional net losses of €107.6 mn.

The company also established approximately €200 mn in provisions during the second quarter for potential consequences of the Iran war.

Additional provisions were recognized during the reporting period to address emerging risks and reinforce existing loss reserves.

Hannover Re strengthened its reserve position despite catastrophe expenditure remaining below budget, maintaining protection against potential deterioration in claims experience.

Management indicated that further balance sheet strengthening would be considered if full-year large losses remain substantially below expectations.

Life and health reinsurance operating profit increases 3.5%

Hannover Re’s life and health reinsurance business increased operating profit by 3.5% to €668.2 mn, compared with €645.3 mn in the first nine months of 2025.

Gross reinsurance revenue increased to €6.3 bn from €5.8 bn. At constant exchange rates, growth would have reached 9.5%. The net reinsurance service result rose to €717.2 mn from €671.3 mn, positioning the business toward its full-year target of approximately €925 mn.

Life and health reinsurance generated €717.2 mn in net reinsurance service earnings, supported by higher revenue and stable operating performance.

New contractual service margin generation from new business and contract extensions declined to €502.8 mn from €584.8 mn. The net contractual service margin nevertheless increased 3.9% to €6.5 bn at September 30, compared with €6.3 bn at the end of 2025.

The loss component associated with new business and contract extensions amounted to €13.9 mn, up from €10.1 mn. The performance remained consistent with Hannover Re’s expectations for the segment.

Investment income rises 40% as bond yields support returns

Hannover Re recorded a 40.4% increase in net investment income to €1.9 bn, compared with €1.3 bn in the previous year.

The improvement reflected higher recurring income from fixed-income securities and the comparative effect of active loss realization in 2025.

The annualized return on investment reached 3.7%, exceeding the company’s full-year objective of approximately 3.5%.

The investment portfolio increased to €70.1 bn from €66.3 bn at year-end 2025, expanding the asset base generating recurring investment income.

Chief Financial Officer Christian Hermelingmeier said growth in Hannover Re’s reinsurance portfolio continued to increase its investable assets.

The company also benefited from reinvesting maturing assets in a higher interest rate environment.

“The profitable growth in our reinsurance portfolio continuously increases our investment volume, while we also benefit from the higher interest rate environment in our reinvesting activities,” Hermelingmeier said.

Investment earnings contributed to the Group’s improved operating performance alongside stronger underwriting results.

Solvency II ratio stands at 242% as insurance reserves increase

Hannover Re reported a Solvency II capital adequacy ratio of 242% at September 30, down from 256% at the end of 2025.

The ratio remained comfortably above the company’s target threshold of more than 200%.

The calculation includes a proportional allowance for the expected 2026 dividend and planned business growth in 2027.

Hannover Re maintained a 42-percentage-point capital buffer above its Solvency II target threshold despite the decline in its reported capitalization ratio.

The Group’s net contractual service margin increased 8.3% to €8.6 bn from €7.9 bn at year-end 2025.

The margin represents deferred profits from existing reinsurance contracts that are expected to be recognized as insurance services are provided.

The risk adjustment for non-financial risk increased to €3.9 bn from €3.7 bn. Together with higher shareholders’ equity, these figures reflect Hannover Re’s capital position and the future earnings embedded in its existing reinsurance portfolio.

Hannover Re confirms 2026 profit guidance of at least €2.7 bn

Hannover Re maintained its full-year Group net income forecast of at least €2.7 bn. The guidance assumes that large-loss expenditure will not materially exceed the €2.3 bn annual budget and that capital markets will not experience unforeseen disruption.

In traditional property and casualty reinsurance, excluding structured reinsurance, gross revenue is expected to increase at a mid-single-digit percentage rate following favorable treaty renewal volumes.

The company continues to target a P&C combined ratio below 87%. Life and health reinsurance is expected to generate a net reinsurance service result of approximately €925 mn, while the full-year investment return target remains around 3.5%.

Hannover Re plans to distribute approximately 55% of IFRS Group net income as dividends, with the objective of maintaining at least the previous year’s dividend per share.

The reinsurer also intends to increase its dividend per share over the longer term.

Management said its confidence in achieving the 2026 guidance reflects the profitability of its underwriting portfolio, higher investment income and continued reserve strengthening.