Hannover Re, one of the world's leading reinsurers, reported a sharp increase in group net income for the 2025 financial year, rising 13.4% to EUR 2.6 billion, exceeding its increased earnings guidance despite challenging market conditions. The company also proposed a 39% higher dividend of EUR 12.50 per share, reflecting a payout ratio of 57% in line with its new dividend strategy.
The reinsurance revenue (gross) grew by 1.5% to EUR 26.8 billion, or 4.7% adjusted for exchange rate effects. The reinsurance service result (net) increased by 15.8% to EUR 3.5 billion. Operating profit (EBIT) rose 5.7% to EUR 3.5 billion. Return on equity reached 21.4%, clearly surpassing the strategic target of more than 14%.
In property and casualty reinsurance, the combined ratio improved to 84.0% from 86.6%, with net large losses totaling EUR 1,725 million, below the budgeted EUR 2.1 billion. The largest losses included EUR 595 million from California wildfires, EUR 329 million from Hurricane Melissa, EUR 118 million from the Myanmar earthquake, and EUR 102 million from Australian hailstorms. The reinsurance service result (net) rose to EUR 2.6 billion.
Life and health reinsurance saw strong demand, with the reinsurance service result (net) climbing to EUR 903.0 million, beating guidance of more than EUR 875 million. Reinsurance revenue (gross) increased to EUR 8.0 billion, and adjusted for exchange rate effects, growth would have been 6.8%.
Investment income fell to EUR 1.7 billion from EUR 2.0 billion, with a return on investment of 2.5%, below the 2.9% target, due to active realization of hidden losses in the fixed-income portfolio to boost future earnings. The portfolio of assets under own management stood at EUR 66.3 billion.
The company's contractual service margin (net) declined 3.1% to EUR 7.9 billion, primarily due to exchange rate effects. The solvency ratio under Solvency II was 256%, comfortably above the 200% threshold, after accounting for the proposed dividend and planned business growth.
For 2026, Hannover Re confirmed its guidance of group net income of at least EUR 2.7 billion, assuming large losses do not exceed EUR 2.3 billion and no unforeseen capital market distortions. Property and casualty reinsurance is expected to grow in the mid-single-digit percentage range with a combined ratio below 87%. Life and health reinsurance targets a reinsurance service result of around EUR 925 million, and the return on investment is projected at around 3.5%.
Clemens Jungsthofel, CEO, stated, "Hannover Re stands for reliability and financial strength. We achieved our increased earnings guidance and took strategic actions to significantly reinforce our future profitability." CFO Christian Hermelingmeier added, "Through systematic realization of hidden losses and expanding resilience in loss reserves, we have equipped Hannover Re with the strongest balance sheet in its history."
Further information, including the financial supplement, is available at https://www.hannover-re.com/en/investors/results-and-reports/#2025.
