Hannover Re may hold the 1.1 pace through 2024 renewals

Hannover Re will likely show similar growth during the pending 2024 reinsurance renewal seasons as seen at the 1.1 renewal with current market conditions extending through the April and the mid-year renewals, top officials have argued. 

“The January 1 renewal should be a good indicator what to expect from a premium growth point of view for the portfolio in general,” Sven Althoff (pictured), Hannover’s chief of P&C reinsurance, told a conference call with equity market analysts. “But we will also continue to be disciplined in our underwriting.” 

Each consecutive renewal seems to present Hannover Re with “some transactions where we may wish to reduce,” but the overall expectation is for “a similar picture with some ups and downs.” 

Hannover Re grew its January book by 6.9% at the 1.1 with the help of a 2.3% average increase in pricing. Price gains leans towards non-proportional covers, where Hannover enjoyed a 10.6% premium increase on a 4.4% price gain. Proportional treaty took a 1.3% price gain and Hannover Re held its growth to 5.3%. 

“We expect the current market environment to prevail for the upcoming April and mid-year renewals,” CEO Jean-Jacques Henchoz told conference participants. Individual regions and lines of business may take their own course based on loss experience and other factors. But for the most part, supply was present across the board. 

For the APAC-heavy April renewals, the combination of the January earthquake on Japan’s Noto peninsula, “a reminder of the exposure in that region,” plus the “very disciplined market environment” should combine to offer some upward price pressure to counter the generally favourable loss experience, Althoff suggested. “I am certain this will play a role,” he told equity market analysts. 

The Australian market remains soothing of a wildcard with loss experience under continual development. Pricing is guaranteed to be “at least stable,” but with possibilities for “further loss activity in that part of the world which may driver prices further up.”

Mid-year renewals, with their highlight of the US and especially Florida nat cat market, could follow recent trend for a more flattish pricing result. “It’s fair to say that US cat renewals were more flattish than some of the rest of world,” Althoff said, “a trend we also expect for mid-year renewals: more flat than further rate increases.”

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