Hannover Re expects further growth after raising 2024 profit outlook

Hannover Rueck SE raised its full-year profit guidance on Monday, following a strong performance in the third quarter driven by robust demand. The German reinsurer reported a 51% increase in net income, reaching €683.3 million for the third quarter, up from €439.4 million in the same period last year. Operating profit rose by 33% to €791.0 million, compared to €484.3 million in the prior year.

Hannover Re expects further growth after raising 2024 profit outlook

Earnings per share (EPS), both basic and diluted, climbed 51% to €5.50, up from €3.64. Reinsurance revenue grew by 8.7% to €6.78 billion, compared to €6.24 billion a year earlier. The combined ratio improved to 88.0%, from 92.2% previously. A combined ratio below 100% indicates profitable underwriting, and a lower ratio is considered better. For the first nine months of 2024, Hannover Rueck reported a 30% increase in net income, rising to €1.82 billion from €1.40 billion. Operating profit surged by 33% to €2.45 billion, up from €1.84 billion. EPS grew by 31% to €15.15, from €11.60, and reinsurance revenue increased by 6.4% to €19.70 billion, from €18.51 billion. CEO Jean-Jacques Henchoz commented, "Due to the appropriate pricing in property and casualty reinsurance, we are achieving a satisfactory level of earnings, which enables us to offer reliable reinsurance protection going forward, as we have in the past. The destruction caused by Hurricanes Helene and Milton serves as a reminder that hurricane season is not over. Nevertheless, we are on track and well-positioned for the remaining months, prompting us to raise our full-year profit target." Hannover Rueck stated that the cost of large losses, amounting to €1.3 billion in the first nine months, remained within its €1.4 billion budget. The biggest losses included €225 million from flooding in Central and Eastern Europe, €130 million from Hurricane Helene in the US, and €121 million from flooding in Dubai and the UAE. The Life & Health reinsurance business group performed as expected, with strong demand for new business in the financial solutions segment, particularly in the US. Looking ahead, Hannover Rueck forecasts net income of approximately €2.4 billion for 2025. Henchoz added, "Demand for high-quality reinsurance protection offered by Hannover Rueck will continue. In this favorable market environment, we see opportunities for profitable growth in both business groups. For 2025, we expect to grow earnings and revenue, with a focus on maintaining long-term earnings stability and resilience."

New outlook

For 2024, Hannover Rueck anticipates reinsurance revenue growth of over 5% based on constant exchange rates. As a result, the company has raised its full-year net income target to around €2.3 billion, up from the previous forecast of at least €2.1 billion. In 2023, net income was €1.82 billion. Reinsurance revenue in property and casualty is expected to increase by over 7%. The company also forecasts a combined ratio of less than 88% in its Property & Casualty reinsurance business, reflecting the improved market conditions. Hannover Rueck expects a combined ratio of less than 89% in property and casualty reinsurance overall. The Life and Health reinsurance business is projected to generate a reinsurance service result of over €850 million in 2024. The company’s dividend strategy remains unchanged, with an expected increase in the ordinary dividend for the 2024-2026 strategy cycle. A special dividend will be considered if capitalization exceeds the capital needed for future growth and if profit targets are met.