The German reinsurer has set out its financial ambition for 2024-2026 strategy cycle, including reinsurance revenue expectations of more than 5% growth next year.
Hannover Re used is investors’ day to announce its targets for the coming 2024 financial year as well as its financial ambition under the new strategy for the next three years through to 2026.
Hannover Re anticipates group net income of at least €2.1bn for the 2024 financial year, an increase of 24% compared to the earnings guidance for 2023.
Reinsurance revenue is expected to grow by more than 5% at group level, with revenue growth in property and casualty reinsurance growing more strongly than in life and health reinsurance.
Hannover Re anticipates a combined ratio below 89% in its property and casualty reinsurance business group in 2024, “owing to the improved market environment”.
“Our strong position in the reinsurance market combined with successful cycle management will result in material earnings growth in 2024,” said Jean-Jacques Henchoz, CEO of Hannover Re.
“Thanks to the improved underlying profitability of our reinsurance business, Hannover Re is superbly placed to continue on its successful course and generate further strong results in the coming financial year,” Henchoz added.
Return on investment should reach at least 2.8%, the reinsurer said.
In its life and health reinsurance arm, Hannover Re expects a reinsurance service result of more than €850m.
Achievement of the profit guidance for 2024 is conditional on large loss expenditure not significantly exceeding the budgeted amount of €1.825bn, the reinsurer said, versus previous year €1.725bn figure, and assumes no “unforeseen distortions” in capital markets.
The reinsurer’s current three-year strategy cycle comes to “a successful close” at the end of 2023.
Despite a challenging economic and geopolitical landscape, Hannover Re said it delivered strong results over this period and hence achieved its strategic objective of “striving for sustainable outperformance”.
The reinsurer turned to its next cycle, through to 2026, dubbed “Staying focused. Thinking ahead” and guided by three watchwords: “focus, grow and accelerate”.
“The new strategy cycle puts the focus squarely on what Hannover Re stands for: we are pragmatic, client-centric and have a business model geared to the utmost efficiency,” said Henchoz.
“Our financial ambition thus builds on our robust foundation to ensure Hannover Re’s lasting stability and resilience,” he continued.
Hannover Re remains true to its “somewhat different” approach, the firm said, the basis of which is “a lean and capital-efficient business model with an unchanged clear focus on reinsurance”.
In concrete terms the reinsurer said it wants to achieve a return on equity of more than 14% annually on average over the upcoming strategy cycle and growth of more than 5% in the operating result (Ebit).
“We shall actively engage with the major trends affecting our business, the increasing global competition for talent, digitalisation and not least climate change, and develop tangible solutions to tackle our clients’ current and future challenges,” Henchoz added.