Hannover Re increased its Group net income in the first nine months of the financial year by 28% and considers itself still in position to achieve the profit target set for the current financial year despite considerable major loss expenditure incurred in the third quarter. 

 “In recent months insurers and reinsurers were faced with unusually heavy losses from hurricanes, flooding and other catastrophic events,” said Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re. “Our solid nine-month result again demonstrates Hannover Re’s resilience in a volatile environment.

Gross written premium for the Group rose by 12% to EUR 21.6 billion (EUR 19.3 billion). At constant exchange rates growth would have reached 14%. Net premium earned increased by 12% to EUR 17.6 billion (EUR 15.8 billion), corresponding to growth of 14% adjusted for exchange rate effects. 

While the underlying business in property & casualty and life & health reinsurance showed a stable development in line with expectations, the investments delivered a substantially better profit contribution than anticipated. 

The operating profit (EBIT) on the Group level increased by 42% to EUR 1,281 million (EUR 903 million). Group net income improved by 28% in the first nine months of the year to EUR 856 million (EUR 668 million). Earnings per share thus amounted to EUR 7.10 (EUR 5.54). 

Property and casualty reinsurance records sharp rise in large loss expenditure 

Premium income in property and casualty reinsurance once again came in substantially higher. The profitable growth was driven by unchanged strong demand for covers primarily from robustly capitalised reinsurers. As a result, Hannover Re was able to secure improved prices and conditions across a broad front in the various rounds of renewals held throughout the current financial year. 

The gross written premium in property and casualty reinsurance climbed by 14% to EUR 15.3 billion (EUR 13.3 billion). The increase would have been 18% adjusted for exchange rate effects. Net premium earned rose by 15% to EUR 12.1 billion (EUR 10.5 billion). At constant exchange rates the increase would have reached 18%. 

Due to significant natural catastrophes in the third quarter, net major loss expenditure increased to EUR 1,070 million (previous year: EUR 1,149 million, thereof EUR 700 million relating to Covid-19) as at the end of September and was thus substantially higher than the budgeted expectation of EUR 849 million for the first nine months. 

No further reserves had to be established for the Covid-19 pandemic in property and casualty reinsurance. 

The largest individual loss for net account in the third quarter was Hurricane Ida, which caused severe storm and flood damage in multiple US states when it made landfall at the end of August as a Category 4 hurricane. The net payments made by Hannover Re to its customers for this event alone added up to EUR 306 million. In addition, Germany and other European countries suffered devastating flood and hail damage in the months of June and July. Hannover Re provided its clients with reinsurance coverage for the low-pressure system Bernd in July in a net strain of EUR 214 million. Further large losses in the third quarter included the civil unrest in South Africa at a cost of EUR 94 million and flooding in China in an amount of EUR 35 million. 

The underwriting result including interest on funds withheld and contract deposits for property and casualty reinsurance totalled EUR 253 million (EUR -146 million). The combined ratio reached 97.9% (101.4%). It was thus above the expected level of no more than 96% for the full year. 

The operating profit (EBIT) in property and casualty reinsurance surged by 80% to EUR 1,061 million (EUR 589 million). Net income improved by 77% to EUR 739 million (EUR 418 million).