After a good third quarter, Hannover Re is becoming more confident for the year as a whole. The outlook has been raised.
HANNOVER (dpa-AFX) – Thanks to a summer with few disasters, the surplus is now expected to reach around 2.6 billion euros, 200 million more than previously announced. Next year it should even be at least 2.7 billion euros, as CEO Clemens Jungsthöfel announced when presenting the interim balance sheet on Monday in Hanover.
The surplus in the third quarter was higher than the market expected, wrote analyst Philip Kett from the investment house Jefferies. With the increased forecasts, the group is also exceeding expectations. Kett’s colleague Kamran Hossain from the US bank JPMorgan was positively surprised by the profit plans for 2026. Hannover Re is known for its conservative calculations for many years.
In the third quarter, Hannover Re earned 651 million euros, two percent less than in the same period last year. However, this was because the group deliberately sold fixed-interest securities at a loss. Because in the core business with major insurance risks, things went better than expected.
There were exceptionally few major losses in the third quarter, said CFO Christian Hermelingmeier. “Almost nothing happened and certainly nothing remarkable.” Hannover Re used this opportunity to realize accumulated losses in its investments. “If the business situation is very good, we look to strengthen our resilience even further,” explained the manager.
For Hermelingmeier, there is no question that further serious natural disasters will continue to affect primary insurers such as Allianz and Generali (Assicurazioni Generali) as well as reinsurers such as Swiss Re, Munich Re (Munich Re) and Hannover Re in the future. Hurricane Melissa in the Caribbean has just shown again “how surprising and devastating natural disasters can be.” From his point of view, a low-loss summer means little: “In insurance terms, three months is just the blink of an eye.”
For some primary insurers in the USA and reinsurers worldwide, the year began with the worst forest fire catastrophe in their history. According to previous calculations by the reinsurer Munich Re, the fires around Los Angeles cost the industry around 40 billion US dollars. Hannover Re contributed 615 million euros of this.
According to current estimates, Hurricane Melissa is likely to cost the insurance industry a maximum of a mid-single-digit billion dollar amount. Hermelingmeier expects the disaster to cost Hannover Re a three-digit million euro amount. However, this will not change the increased profit target for 2025.
Because there were so few major losses in the second and third quarters, Hannover Re earned more in the first nine months than a year earlier. The surplus increased by almost eight percent year-on-year to almost 2 billion euros. Despite the fires in California, total major losses, at just under 1.2 billion euros, were around ten percent lower than in the same period last year.
The year-long rise in reinsurance prices has now come to a temporary end. The world’s largest reinsurers have already reported this year that their premium rates have fallen, adjusted for inflation and changing risks. Hannover Re expects at most stagnating prices for the contract renewal on January 1, 2026.
However, shareholders can look forward to more profits and a higher dividend: Hannover Re recently announced that it would pay out around 55 percent of its annual profits as dividends in the future. This would mean that the distribution for 2025 would increase from a total of 9 euros to more than 11.80 euros per share compared to the previous year. The biggest beneficiary is the insurance group Talanx with its main brand HDI, which owns a good half of the Hannover Re shares.
Shares are rising
Hannover Re shares temporarily rose by 1.85 percent to 253.20 euros on XETRA. The price is currently still a long way from the record high of EUR 292.60 at the beginning of May. Since the beginning of the year there has been an increase of 5.5 percent, which means that the shares are clearly lagging behind the DAX, which has risen by a good fifth.
dpa (AFX)
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