Hannover Re increases earnings and dividend, reinforces sustained profitability significantly

Hannover Re increases earnings and dividend, reinforces sustained profitability significantly

• Group net income rises sharply by 13.4% to EUR 2.6 billion
• Reinsurance revenue (gross) grows by 4.7% adjusted for exchange rate effects  
• Property and casualty reinsurance: Good result with increased resilience in the loss reserves; large losses below budgeted expectation
• Life and health reinsurance: Reinsurance service result beats guidance
• Return on investment of 2.5% due to active realisation of hidden losses
• Return on equity clearly above strategic target at 21.4%
• Proposed dividend: Increase by 39% to EUR 12.50 per share 
• Guidance for 2026 fully confirmed: Group net income of at least EUR 2.7 billion expected

Hannover, 12 March 2026: Hannover Re achieved its increased earnings guidance in the 2025 financial year despite challenging market conditions. Group net income rose sharply to EUR 2.6 billion, while at the same time Hannover Re continued to significantly strengthen its resilience and sustained profitability.

The Executive Board and Supervisory Board will propose to the Annual General Meeting a 39% higher dividend of EUR 12.50 per share for the 2025 financial year (previous year’s total dividend: EUR 9.00 per share). The payout ratio of 57% (previous year: 46%) is thus in line with the new dividend strategy aimed at distributing around 55% of IFRS Group net income.

"Hannover Re stands for reliability and financial strength. We achieved our increased earnings guidance in 2025 and at the same time made the most of another successful financial year to take strategic actions aimed at significantly reinforcing our future profitability," said Clemens Jungsthöfel, Chief Executive Officer of Hannover Re. “With a further substantial increase in the proposed dividend and the higher payout ratio, our shareholders are also participating more than ever in Hannover Re’s success.”

Group net income rises sharply by 13.4% to EUR 2.6 billion

Reinsurance revenue (gross) for the Group rose by 1.5% in the 2025 financial year to EUR 26.8 billion (EUR 26.4 billion). Growth would have reached 4.7% at constant exchange rates.

The reinsurance service result (net) increased by a substantial 15.8% to EUR 3.5 billion (EUR 3.0 billion). The reinsurance finance result (net) adjusted for exchange rate effects, which is structurally negative and reflects the interest accretion on technical reserves discounted in prior years, stood at EUR -1.4 billion (EUR -1.1 billion).

The currency result improved considerably to EUR 243.2 million (EUR -108.0 million), driven largely by the appreciation of the euro against the US dollar. Other income and expenses amounted to EUR -541.2 million (EUR -482.9 million).

The operating profit (EBIT) increased by 5.7% to EUR 3.5 billion (EUR 3.3 billion). Group net income rose sharply by 13.4% to EUR 2.6 billion (EUR 2.3 billion). Earnings per share reached EUR 21.90 (EUR 19.31).

Given the high profitability of its business, underutilisation of the large loss budget and a positive currency result, Hannover Re was able to deliver increased net income while also significantly boosting its earnings power for future years. To this end, Hannover Re further expanded the resilience of its loss reserves and actively realised hidden losses in its investment portfolio.

Return on equity clearly above strategic target at 21.4%

Shareholders’ equity amounted to EUR 12.9 billion (EUR 11.8 billion) as at 31 December 2025. The return on equity came to 21.4% (21.2%) and thus clearly surpassed the strategic target of more than 14%.

“Through systematic realisation of hidden losses in our investments and by further expanding our resilience in the loss reserves, we have continued to significantly reinforce our financial soundness. In an increasingly challenging market landscape, Hannover Re is thus equipped with the strongest balance sheet in its history,” said Christian Hermelingmeier, Chief Financial Officer of Hannover Re. “Our commitment to supporting our clients with stability and reliability is further underscored by our extremely robust solvency ratio.”

The contractual service margin (net), which quantifies the unearned profit expected from the business written, declined by 3.1% to EUR 7.9 billion (31 December 2024: EUR 8.2 billion). Exchange rate effects were the primary factor here. The risk adjustment for non-financial risk decreased to EUR 3.7 billion (EUR 4.0 billion).

The capital adequacy ratio under Solvency II, which measures Hannover Re’s risk-carrying capacity, stood at 256% at the end of December (31 December 2024: 261%). It already takes into account the proposed dividend for 2025 as well as the planned business growth in 2026 and remains comfortably above the threshold of more than 200%.

Good result in property and casualty reinsurance with increased resilience in the loss reserves

The favourable outcome of the treaty renewals throughout 2025 and a profitability-centred underwriting approach are reflected in the positive development of the new business CSM (net), which increased by a substantial 12.1% in the 2025 financial year to EUR 3.1 billion (EUR 2.7 billion).

Reinsurance revenue (gross) in property and casualty reinsurance rose slightly by 0.6% to EUR 18.8 billion (EUR 18.7 billion). Growth would have amounted to 3.8% at constant exchange rates. Allowing for a base effect from the previous year, currency-adjusted growth would have reached roughly 10% and thereby surpassed the target of more than 7%.

Net expenditures for large losses in the 2025 financial year totalled EUR 1,725 million (EUR 1,629 million) and thus came in below the full-year budgeted expectation of EUR 2.1 billion. Even though fewer events were recorded overall, individual disasters caused above-average loss amounts.

The largest expenditures (net) for individual losses were the California wildfires at the beginning of the year in an amount of EUR 595 million, Hurricane Melissa in October at EUR 329 million, the earthquake in Myanmar at EUR 118 million and severe hailstorms that impacted Australia in November at a cost of EUR 102 million.

The reinsurance service result (net) increased considerably to EUR 2.6 billion (EUR 2.1 billion). The combined ratio improved to 84.0% (86.6%). Adjusted for exchange rate effects, the reinsurance finance result (net) amounted to EUR -1,173.3 million (EUR -944.7 million).

The operating profit (EBIT) rose to EUR 2.6 billion (EUR 2.4 billion).

Reinsurance service result in life and health reinsurance beats guidance

All segments of life and health reinsurance enjoyed sustained demand, even though business was marked by intense competition worldwide.

The new CSM generation (net), comprised of new business (net) and contract extensions (net), amounted to EUR 766.4 million (EUR 624.1 million) and thus came in sharply higher. The contractual service margin (net) declined to EUR 6.3 billion (EUR 6.5 billion) as at the end of the financial year and thus failed to reach the growth target of 2%. Adjusted for exchange rate effects, growth of 3.4% would have been recorded. 

Reinsurance revenue (gross) increased to EUR 8.0 billion (EUR 7.7 billion). Growth of 6.8% would have been booked at unchanged exchange rates.

The reinsurance service result (net) climbed to EUR 903.0 million (EUR 882.9 million), surpassing the target of more than EUR 875 million. The included new business LC (net) amounted to EUR 12.7 million (EUR 6.3 million). Adjusted for exchange rate effects, the reinsurance finance result (net) amounted to EUR -190.0 million (EUR -170.3 million).

The operating result (EBIT) for life and health reinsurance contracted by 5.1% to EUR 886.1 million (EUR 933.9 million).

Return on investment of 2.5% due to active realisation of hidden losses

The portfolio of assets under own management was slightly higher than the comparable level of the previous year at EUR 66.3 billion (EUR 65.9 billion). The pleasing operating cash flow as well as lower USD and GBP interest rates offset declines associated with the revaluation of US dollar holdings and higher eurozone interest rates. The asset allocation remained broadly stable in the reporting period.

Investment income amounted to EUR 1.7 billion (EUR 2.0 billion). The return on investment reached 2.5% and thus fell short of the guided target return of around 2.9%. This was primarily due to the strategically motivated active realisation of hidden losses in the fixed-income portfolio to boost future earnings.

Guidance for 2026 fully confirmed: Group net income of at least EUR 2.7 billion expected

Hannover Re expects Group net income of at least EUR 2.7 billion for the 2026 financial year.

"With our solution-driven and pragmatic ‘somewhat different’ approach, we continue to be a strong and reliable partner for our clients,” said Clemens Jungsthöfel. “Thanks to our proven strengths and robust balance sheet, and with the additional steps taken to increase our resilience, we are optimally placed to deliver attractive earnings growth even in a challenging market – in 2026 and beyond."

Adjusted for exchange rate effects, property and casualty reinsurance is expected to deliver growth in reinsurance revenue (gross) in the mid-single-digit percentage range in traditional business (excluding structured reinsurance). Hannover Re also anticipates a combined ratio below 87%.

In life and health reinsurance, Hannover Re expects a reinsurance service result of around EUR 925 million.

The return on investment is projected to reach around 3.5%.

Achievement of the earnings guidance for 2026 is based on the premise that large loss expenditure does not significantly exceed the budgeted level of EUR 2.3 billion and assumes that there are no unforeseen distortions on capital markets.

In October, the Executive Board approved a realignment of the dividend policy, which applies for the first time in the 2025 financial year. The payout ratio for the dividend was raised to around 55% of IFRS Group net income. The goal is to distribute a dividend per share at least on the level of the previous year and to increase it over the long term. Going forward, it is envisaged that an additional special dividend will only be paid in exceptional circumstances.
 

Hannover Re one of the world's leading reinsurers. We transact all lines of property & casualty and life & health reinsurance and are present worldwide with around 4,000 staff. Property and casualty reinsurance in Germany is written by the subsidiary E+S Rück. Established in 1966, Hannover Re is recognised as a reliable partner for innovative risk solutions, exceptional customer intimacy and financial soundness. The rating agencies most relevant to the insurance industry have awarded both Hannover Re and E+S Rück very good financial strength ratings: Standard & Poor’s AA- "Very Strong" and A.M. Best A+ "Superior".

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