Hannover Re expands portfolio by 7.6% following successful January renewals.

German reinsurer Hannover Re has reported a 2.1% decline in inflation and risk-adjusted pricing for renewed business at the January 1, 2025, renewals. However, the company capitalized on increased demand for reinsurance, expanding its portfolio by 7.6% to over EUR 11.03 billion.

According to Hannover Re, pricing during the renewals remained stable or saw slight reductions compared to the previous year. The reinsurer had treaties worth EUR 10.3 billion up for renewal, representing 59% of its traditional property and casualty reinsurance business (excluding facultative reinsurance, insurance-linked securities, and structured reinsurance). The company renewed EUR 9.304 billion in premium volume, while treaties worth EUR 950 million were terminated. With the addition of EUR 1.734 billion from new agreements and pricing or share adjustments, Hannover Re’s total renewed premium volume increased to EUR 11.038 billion.

“Reinsurance prices remain aligned with risk levels, though competition in loss-free treaties led to pricing declines in certain competitive segments. Nevertheless, conditions and retentions remained largely stable. Our strong portfolio quality and sustained demand position us well for further renewals,” said Sven Althoff, Hannover Re’s Executive Board member responsible for property and casualty reinsurance.

He added, “Sustainable reinsurance protection requires adequate pricing and terms, especially given the challenges posed by climate change and extreme weather. The recent Los Angeles wildfires underscore this reality.”

Performance by Business Segment

Hannover Re maintained its strong presence in the natural catastrophe reinsurance sector, benefiting from stable pricing and market conditions. However, risk-adjusted pricing in this segment declined by 5.4%, with the most significant softening observed in the U.S. market. Despite this, cedents’ retentions remained stable and, in some cases, even increased for loss-affected treaties.

Outside the catastrophe space, credit, surety, and political risk reinsurance experienced a 4.5% premium growth in a favorable market. Conversely, aviation and marine reinsurance contracted by 6.2%, despite Hannover Re increasing its market share in aviation. The marine segment faced moderate price declines due to surplus capacity, despite large loss occurrences. Agricultural reinsurance premium volume fell by 9.2%, partly due to a strategic reduction in China for profitability reasons.

Regional Breakdown

• Europe, Middle East, and Africa (EMEA): Premium volume grew by 9.7%, with Hannover Re strengthening its position in Germany due to attractive risk-adjusted pricing. The Middle East and Türkiye saw notable rate increases for loss-affected business.
• Americas: Premium volume rose by 13.5% year-over-year. The U.S. property insurance market remained appealing despite pricing pressure, while liability lines saw some risk-adjusted price improvements. Substantial premium growth was recorded in the insurtech sector, and broader property and casualty growth contributed to the increase. Hannover Re noted that the Los Angeles wildfires could significantly influence property insurance renewals throughout the year.
• Asia-Pacific: Premium volume grew modestly by 0.8%, with fierce competition, particularly in Southeast Asia and China.

Financial Performance and Strategic Outlook

Hannover Re’s CEO, Jean-Jacques Henchoz, described the renewals as successful, citing an attractive market that facilitated further profitable growth. He noted that demand for high-quality reinsurance remained strong and that the firm’s robust capital position allowed it to offer additional coverage at appropriate terms.

In its preliminary, unaudited financial results for 2024, Hannover Re reported an operating profit of EUR 3.3 billion. Additionally, the company expanded its natural catastrophe retrocession protections by EUR 100 million to over EUR 1.2 billion, though its K-Cessions sidecar decreased as expected.

Looking ahead, Hannover Re reaffirmed its 2025 guidance. Henchoz expressed optimism about achieving the firm’s growth targets, emphasizing the importance of expansion in both traditional reinsurance and structured reinsurance.

“The successful January renewals reinforce our positive outlook for 2025. Growth in traditional reinsurance and a double-digit increase in structured reinsurance will be key to reaching our targets,” he said.

He concluded by highlighting the early-year impact of the California wildfires, stressing the importance of Hannover Re’s prudent underwriting and risk management approach.