Hannover Re achieved its increased earnings guidance for the 2025 financial year, reporting a 13.4% rise in group net income to EUR 2.6 billion, despite challenging market conditions. The reinsurer also proposed a 39% higher dividend of EUR 12.50 per share, reflecting a payout ratio of 57% under its new dividend strategy targeting around 55% of IFRS Group net income. The company emphasized a significant strengthening of its resilience and sustained profitability through strategic actions, including expanding loss reserve resilience and actively realizing hidden losses in its investment portfolio.
Group net income rose sharply to EUR 2.6 billion (2024: EUR 2.3 billion), with earnings per share reaching EUR 21.90 (2024: EUR 19.31). Reinsurance revenue (gross) grew by 1.5% to EUR 26.8 billion, or 4.7% at constant exchange rates. The reinsurance service result (net) increased by 15.8% to EUR 3.5 billion, while the operating profit (EBIT) rose 5.7% to EUR 3.5 billion. The return on equity stood at 21.4%, clearly surpassing the strategic target of more than 14%.
In property and casualty reinsurance, the reinsurance service result (net) increased considerably to EUR 2.6 billion, with the combined ratio improving to 84.0%. Net large loss expenditures totaled EUR 1,725 million, below the budgeted expectation of EUR 2.1 billion. Major losses included EUR 595 million from California wildfires, EUR 329 million from Hurricane Melissa, EUR 118 million from an earthquake in Myanmar, and EUR 102 million from hailstorms in Australia. The new business CSM (net) rose 12.1% to EUR 3.1 billion, reflecting favorable treaty renewals and a profitability-focused underwriting approach.
Life and health reinsurance delivered a reinsurance service result (net) of EUR 903.0 million, beating the guidance of more than EUR 875 million. Reinsurance revenue (gross) increased to EUR 8.0 billion, with growth of 6.8% at constant exchange rates. The new CSM generation (net) rose sharply to EUR 766.4 million. However, the contractual service margin (net) declined to EUR 6.3 billion, missing the growth target of 2% but showing 3.4% growth adjusted for exchange rate effects.
The return on investment was 2.5%, below the guided target of around 2.9%, primarily due to active realization of hidden losses in the fixed-income portfolio to boost future earnings. Investment income amounted to EUR 1.7 billion. The asset portfolio under own management stood at EUR 66.3 billion, slightly above the prior year.
Hannover Re confirmed its guidance for 2026, expecting group net income of at least EUR 2.7 billion. For property and casualty reinsurance, it anticipates mid-single-digit percentage growth in reinsurance revenue (gross) in traditional business and a combined ratio below 87%. In life and health reinsurance, a reinsurance service result of around EUR 925 million is expected. The return on investment is projected at around 3.5%. The guidance assumes large loss expenditure does not significantly exceed the budgeted level of EUR 2.3 billion and no unforeseen capital market distortions.
The company's solvency ratio under Solvency II stood at 256% as of December 2025, comfortably above the threshold of 200%, already accounting for the proposed dividend and planned business growth. Shareholders' equity rose to EUR 12.9 billion. Hannover Re's CEO Clemens Jungsthofel stated, With our solution-driven and pragmatic ‘somewhat different’ approach, we continue to be a strong and reliable partner for our clients.
CFO Christian Hermelingmeier added, 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.
Further details can be found in the financial supplement at Hannover Re Results and Reports. The original press release is available on NewMediaWire.
