Key Takeaways:
- Group net income rose 7% to EUR 1.4 billion in the first half.
- Combined ratio improved to 83.2% from 88.4% as large losses came in below budget.
- Full-year guidance of at least EUR 2.7 billion net income confirmed.
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Hannover Re posts 7% profit gain despite currency headwinds
Hannover Re reported first-half net income of EUR 1.4 billion, up 7%, and confirmed full-year guidance of at least EUR 2.7 billion.
"The very good half-year result puts Hannover Re in an excellent position," Chief Executive Officer Clemens Jungsthöfel said. "Taken together with our resilience, which we again strengthened considerably in the previous year, and our lean operating model, I am looking to the full 2026 financial year and our long-term profitability with confidence."
Operating profit rose 9.7% to EUR 1.9 billion, while earnings per share reached EUR 11.66, up from EUR 10.90. The annualized return on equity came to 21.5%. Reinsurance revenue fell 3.1% to EUR 12.9 billion, though it would have grown 0.7% at constant exchange rates.
The result came despite a stronger US dollar, which swung the currency result to a EUR 52.9 million loss from a EUR 236.1 million gain a year earlier. Second-quarter net profit fell to EUR 695.3 million from EUR 833.5 million, still beating the EUR 682 million consensus, according to company-provided estimates.
In property and casualty reinsurance, the combined ratio improved to 83.2% from 88.4%, beating the full-year target of less than 87%. Large losses totaled EUR 784.7 million, below the EUR 1,024.6 million budgeted for the period. The largest natural-catastrophe claims were Winter Storm Fern in the US and Canada at EUR 130.4 million, Atlantic windstorms hitting the Iberian Peninsula and Morocco at EUR 126.4 million, and a June earthquake in Venezuela at EUR 75.0 million. Hannover Re also set aside roughly EUR 200 million for potential impacts of the Iran war.
Life and health reinsurance revenue rose 9.1% to EUR 4.1 billion, with the net reinsurance service result climbing 7.5% to EUR 478.0 million. The investment result reached EUR 1.3 billion, lifting the annualized return on investment to 3.7%, ahead of the roughly 3.5% target. The investment portfolio grew to EUR 69.4 billion from EUR 66.3 billion at year-end.
Treaty renewals as of June 1 and July 1 brought continued price declines of 4.5% on an inflation- and risk-adjusted basis, while volumes rose 12.3%. The Solvency II capital adequacy ratio stood at 254% at the end of June.
The guidance confirmation shows management expects underwriting profitability to hold even as reinsurance prices soften across renewals. Investors will watch second-half large-loss experience, with the full-year budget set at EUR 2.3 billion, and the dividend, targeted at roughly 55% of net income.
This article is for informational purposes only and does not constitute investment advice.
