Hannover Re lifts net income 6.9% to €2.1 billion in 9 months
Key Facts
Hannover Re reported on November 9 that group net income rose 6.9% to €2.1 billion in the first nine months of 2026, compared with €2.0 billion in the same period. Operating profit increased 16.5% to €2.9 billion from €2.5 billion, while net reinsurance service result rose to €2.6 billion from €2.4 billion. The company maintained its guidance for net income of at least €2.7 billion for the full year. Achieving the target depends, the company said, on large-loss expenses not materially exceeding its budget of €2.3 billion and on no unexpected disruption in capital markets. Chief Executive Clemens Jungsthöfel said the company was satisfied with business developments, adding that "a continued focus on underwriting discipline and a lean operating model enables us to achieve profitable growth across different market phases."
In property and casualty reinsurance, net service result was €1.9 billion, compared with €1.7 billion, and the combined ratio improved to 83.7% from 86.0% in the same period. The ratio was below the company's full-year expectation of less than 87%. However, the segment's gross revenue fell 4.9% to €13.2 billion from €13.9 billion; at constant exchange rates, the decline would have been 2.4%. At group level, gross reinsurance revenue was €19.5 billion versus €19.7 billion, and would have posted growth of 1.1% at constant exchange rates. By contrast, life and health reinsurance revenue rose to €6.3 billion from €5.8 billion, equivalent to growth of 9.5% at constant exchange rates; the segment's net service result also increased to €717.2 million from €671.3 million.
Pricing pressure remained evident in property and casualty, with the net contractual service margin for new business falling 11.9% to €2.3 billion from €2.6 billion. The company said increased volumes of profitable business in renewal rounds partly offset lower prices and currency effects. An Investing.com report published on November 9 said risk-adjusted prices for property and casualty treaty renewals fell 3.2% at the January 1 renewals, 3.6% at the April 1 renewals, and 4.5% at the June 1 and July 1, 2026 renewals. This trend provides context for the segment's lower revenue, despite growth in profitable renewal volumes. In the third quarter, group net income was €694.7 million, compared with the company's compiled average forecast of €638.4 million, while operating profit was €979.7 million against expectations of €907 million.
Large-loss payments in property and casualty totaled €1,316 million in the first nine months, versus €1,177 million in the same period, but were below the interim budget of €1,786.5 million. Hannover Re said it had accounted for the full nine-month large-loss budget in calculating the period's result, while the full-year 2026 budget is about €2.3 billion. Significant natural catastrophe losses included the Colombia earthquake in August, with a net cost of €215.7 million. Atlantic storms that affected the Iberian Peninsula and Morocco cost €135.5 million, while winter storm Fern in the United States and Canada generated expenses of €107.6 million. These items form part of the company's large-loss budget calculation, on which its annual profit guidance remains conditional.
Net investment income rose 40.4% to €1.9 billion from €1.3 billion, driven mainly by investment losses realized in the prior year and higher recurring income from fixed-income securities, the company said. The annualized investment return was 3.7%, above the full-year target of about 3.5%. The investment portfolio reached €70.1 billion on September 30, compared with €66.3 billion on December 31, 2025. Chief Financial Officer Christian Hermelingmeier said profitable growth in the reinsurance portfolio increases the volume of investments, and the company benefits from higher interest rates when reinvesting funds. He added that both factors support investment income and its contribution to group earnings.
The annualized return on equity was 21.1%, compared with 22.0% in the same period. The Solvency 2 capital adequacy ratio stood at about 242% at the end of September, down from 256% at the end of 2025, but remained above the 200% threshold. The company said the September reading includes the expected 2026 dividend on a pro rata basis and planned business growth in 2027. Investing.com reported that Hannover Re shares fell by as much as 2.3% during trading on November 9 before trimming losses to 1.6%. The share move came despite third-quarter results exceeding the compiled average forecasts for net income and operating profit.
Hannover Re reaffirmed its guidance for currency-adjusted growth in traditional reinsurance revenue in the mid-single-digit range in 2026, a combined ratio below 87%, and an investment return of about 3.5%. The company's net income reached €1.4 billion in the first half, up 7.0%, when it said it was on track to achieve its target of at least €2.7 billion for the year. The company has set February 4, 2027, for its 2027 renewals and March 11, 2027, for the announcement of full-year 2026 results. These will be the next milestones for assessing renewal developments and closing the financial year. The annual net income target remains tied to the company's assumptions for large losses and capital markets.