Hannover Re grows at 1 January amid 3.2% risk adjusted price decline – Jungsthöfel

Hannover Re increased premium income in traditional property and casualty reinsurance by 3.3% at the 1 January 2026 renewals despite an average risk adjusted price decline of 3.2%.

The German reinsurer said largely stable terms and conditions supported the overall quality of the business written in a highly competitive market.

Hannover Re reported preliminary group net income of €2.64bn for 2025, up from €2.33bn, in line with expectations after raising its earnings target during the fourth quarter.

Clemens Jungsthöfel, CEO of Hannover Re, suggested the reinsurer was able to grow profitably despite pricing pressure.

“We booked profitable growth in a highly competitive market environment in the renewals at the start of the year,” Jungsthöfel said.

“Our strong market position, long-standing and partnership-focused client relationships, as well as cost advantages were crucial factors,” he said.

“We were able to partially offset more significant price reductions in certain lines within our overall portfolio thanks to our broad positioning,” Jungsthöfel continued.

“In areas where business is profitable, we were able to add to our market shares. The quality of our written portfolio remains on a good level overall,” he added.

Treaties with a premium volume of nearly €10.2bn were up for renewal at 1 January, representing 61% of traditional P&C business.

Hannover Re renewed €9.37m of this business and cancelled €827m, adding €1.17bn from new and restructured treaties and changes in shares and prices to reach a renewed premium volume of €10.54bn.

Sven Althoff, executive board member responsible for property and casualty reinsurance, said pricing pressure was more pronounced than expected in some areas.

“While treaty terms and conditions remained largely stable, price declines were more pronounced than anticipated, especially in highly competitive lines and for contracts with a moderate loss experience,” Althoff said.

“The price level is nevertheless above the multi-year average and remains commensurate with the risks,” he said.

“We therefore continued to profitably grow our portfolio by strengthening existing client relationships and developing new ones,” Althoff added.

Hannover Re reported regional growth of 6.5% in the Americas, 0.4% in Europe, Middle East and Africa, and 1.9% in Asia Pacific.

The reinsurer said specialty lines grew by 5.8% despite competitive conditions.

Credit, surety and political risks delivered double digit growth, while aviation and marine volumes reduced as underwriting discipline increased.

Agricultural business expanded in core markets including Brazil and the US, while cyber and digital business maintained market share and added new business.

In natural catastrophe business, Hannover Re recorded risk adjusted rate reductions of 10% to 20% amid abundant market capacity, although prices remained adequate overall.

The company said the launch of Hannover Re Capital Partners strengthened its cooperation with capital markets for natural catastrophe covers.

Hannover Re confirmed guidance for 2026 of group net income of at least €2.7bn.

“Thanks to our conservative reserving in property and casualty reinsurance and the active realisation of losses in our investments, we have laid the foundation for achieving further sustained earnings growth over the coming years,” Jungsthöfel added.