Hannover Re reported a 13.2% increase in group net income for the first half of 2025, reaching EUR 1.3 billion despite high catastrophe losses in the first quarter. The company also strengthened its balance sheet resilience by increasing reserves, particularly in property and casualty reinsurance.
Reinsurance revenue (gross) rose by 3.3% to EUR 13.3 billion compared to the previous year, with growth at constant exchange rates estimated at 4.3%. The reinsurance service result (net) remained stable at EUR 1.4 billion, while the currency result improved significantly due to the appreciation of the euro against the US dollar.
Operating profit (EBIT) increased by 6.3% to EUR 1.8 billion, and earnings per share reached EUR 10.90, up from EUR 9.63 a year earlier.
Shareholders' equity stood at EUR 11.1 billion as of June 30, down from EUR 11.8 billion at year-end 2024, while book value per share was reported at EUR 92.00 compared to EUR 97.80 previously. The annualised return on equity was recorded at 23%, exceeding Hannover Re’s strategic target of more than 14%.
The contractual service margin (net), which measures unearned profits on business written, grew by nearly four percent to reach EUR 8.5 billion since December last year.
The company’s capital adequacy ratio under Solvency II remained steady at 261%, well above its threshold of over 200%. This robust capitalisation allowed Hannover Re to redeem a hybrid bond in the second quarter without refinancing.
"On the basis of the good business performance of the past six months and the positive currency result, we further strengthened our balance sheet. In concrete terms, we have further increased the level of reserves in property and casualty reinsurance," said Christian Hermelingmeier, Chief Financial Officer of Hannover Re. "This measure not only prepares us better for future loss events, but also enables us to continue to minimise earnings volatility in the future."
In property and casualty reinsurance, gross revenue grew by nearly five percent to reach EUR 9.5 billion for the period under review; this would have been six percent if exchange rates had remained unchanged.
Expenditures for large losses totalled almost one billion euros during this period—driven mainly by California wildfires—slightly exceeding budgeted expectations.
The largest individual losses included California wildfires (EUR 615 million), a fire at an oil refinery in Texas (EUR 76 million), an earthquake in Myanmar (EUR 59 million), and tornadoes in the US Midwest (EUR 50 million).
External analysis put resilience in loss reserves at approximately EUR 2.5 billion as of December last year; these reserves were further bolstered through prudent policies during this reporting period.
The combined ratio—a key profitability metric—stood at just over eighty-eight percent and was slightly higher than targeted for full-year results due primarily to additional reserving actions.
In life and health reinsurance operations developed as anticipated with new business contractual service margin rising while gross revenue contracted marginally due mainly to currency effects; operating profit declined slightly compared with last year but remains on track toward full-year targets.
Return on investment reached an annualised rate of about three-point-three percent amid contraction in investment portfolio value largely attributed to valuation changes on US dollar-denominated assets.
"Our lean, partnership-based business model, our pragmatic corporate culture and our resilience remain as indispensable for sustainable reinsurance protection as adequate prices and conditions on the market," said Clemens Jungsthöfel."Based on the numbers for the first six months, I am confident of our ability to generate further profitable growth in the second half of the year and achieve our full-year targets."
Looking ahead into treaty renewals later this year—including those covering North American natural catastrophe risks—the company expects modest price declines but projects that property & casualty reinsurance revenue will grow more than seven percent adjusted for exchange rates while maintaining a combined ratio below eighty-eight percent.
Guidance remains unchanged: Hannover Re aims for group net income around two-point-four billion euros provided there are no major unforeseen market disruptions or exceptionally high loss expenditures beyond planned levels.
Hannover Re is among leading global reinsurers with about four thousand employees worldwide offering both property & casualty as well as life & health coverage through various subsidiaries including E+S Rück handling German business lines since its founding in nineteen sixty-six.
Both Standard & Poor's ("AA- Very Strong") and A.M.Best ("A+ Superior") continue awarding top financial strength ratings reflecting ongoing stability within core operations.