Hannover Re profit soars 13% in Q1, buoyed by P&C reinsurance renewal

Hannover Re, third-largest reinsurance group in the world, exceeded expectations in Q1 2023 with a 13% net profit hike. The company’s property and casualty (P&C) reinsurance saw a “substantial” boost in new business value, thanks to improved pricing and conditions during renewals, while catastrophe losses remained within bounds. Hannover Re is targeting a full-year group net profit of at least €1.7 billion.

The German reinsurer generated a higher profit of €484 million in the first quarter, compared with €428 million in the same period last year. Its reinsurance revenue remained broadly unchanged at €6.6 billion, but the new business value (net) surged to €1.5 billion in Q1 2023 from €1.0 billion in Q1 2022.

Hannover Re’s P&C reinsurance saw stable revenue of €4.6 billion, and the expenditures from catastrophe losses (€334 million) were within the bounds of expectations. The reinsurer claimed “significantly better” risk-adjusted prices and conditions at 1/1, attributing “substantially higher” new business value to its “quality-focused underwriting approach”.

The company’s largest losses in Q1 2023 were attributed to the earthquake in Turkey, which cost €201 million, and an intense cyclone and major flooding that hit New Zealand, resulting in expenditures of €52 million and €47 million, respectively.

The income from investments amounted to €381 million, slightly lower than the same quarter of the previous year at €393 million.

Hannover Re aims to achieve a 5% growth in its total reinsurance revenue for 2023, which will enable it to meet its full-year net profit target of €1.7 billion, should large loss expenses remain within the budgeted level of €1.725 billion. It expects to see “moderate growth” in its investment portfolio.

Jean-Jacques Henchoz (pictured), chief executive officer of Hannover Re, said: "With the result for the first three months we have achieved more than a quarter of the full-year guidance of at least €1.7 billion and are thus very much on course. At the same time, we have further strengthened our resilience. In the face of the current challenges we are thereby remaining a reliable partner for our clients."

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