Global reinsurer Hannover Re generated net income of €710.6 million in the first quarter of 2026, an increase of 47.9% on the prior year, as the reinsurance service result for the period jumped by a significant 72.9% to €890.2 million.
The large European reinsurer has reported a strong set of results for the opening quarter of the year, including gross reinsurance revenue of €6.5 billion, reflecting growth of 0.6% adjusted for exchange rate effects.
Group-wide, the net reinsurance finance result adjusted for exchange rate effects, which Hannover Re explains is structurally negative and reflects the interest accretion on technical reserves discounted in prior years, totalled -€360.1 million in Q1’26, up on the prior year’s -€333.3 million.
The Group’s operating profit increased by almost 40% to €971.1 million in Q1’26, compared with €696.5 million in Q1’25. Shareholders’ equity amounted to €13.9 billion as at 31 March 2026, up from €12.9 billion at the end of December 2025, as the return on equity came to 21.2%, so above the target of more than 14%.
Within the property and casualty (P&C) reinsurance business, the net new business CSM decreased in the first quarter of 2026 by 26.8% to €1.1 billion, which is a reflection of Hannover Re’s experience at the January 1 renewals, where premium volume rose 3.3% with an inflation and risk-adjusted price decline for the renewed business of 3.2%.
P&C gross reinsurance revenue hit €4.5 billion in Q1’26, down from €5.1 billion a year earlier, attributable to differing developments within property and casualty reinsurance. “While traditional reinsurance delivered diversified growth of 2.1% adjusted for exchange rate effects, revenue in structured reinsurance declined due to the reduction of individual larger-volume contracts,” notes Hannover Re.
Large loss costs within P&C during the quarter declined to €206.9 million for Q1’26, so came in below the large loss budget for the first quarter of €480.3 million. “Given that it is still too early to reliably estimate the further economic fallout of the Iran war, Hannover Re anticipates that the remaining first-quarter budget for large losses will comfortably suffice to cover any loss expenditures that may potentially have occurred up to that point. So far, however, only a minimal number of concrete notifications have been received,” explains the firm.
The largest net payments for individual losses were attributable to Winter Storm Fern in the US and Canada at the start of the year at a cost of €124.8 million as well as the Atlantic windstorms Kristin and Leonardo, which similarly caused loss expenditures of €34 million on the Iberian Peninsula and in Morocco, explains the reinsurer.
The P&C net reinsurance service result rose to €636 million in Q1’26 from €271.6 million in Q1’25, as the combined ratio strengthened to 83.6% from 93.9%, coming in below the full-year 2026 target of less than 87%. Further, the segment’s operating profit improved by 72.9% to €767.2 million in Q1’26.
At the recent April renewals, when Hannover Re renews business in the Asia Pacific region and North America as well as in some specialty lines, “treaty negotiations here resulted in stable or slightly softer conditions at continued adequate prices.” In fact, Hannover Re’s premium volume increased by 18.8%, with an inflation and risk-adjusted price decline of 3.6% recorded for the renewed business.
Turning to the life and health (L&H) reinsurance business, Hannover Re reports that all segments experienced sustained demand despite intense competition worldwide.
The L&H reinsurance net new CSM generation increased to €248.6 million in Q1’26, compared with €231.7 million a year earlier, as the net contractual service margin increased by 3% to €6.5 billion.
The segment’s gross reinsurance revenue increased by roughly €100 million to €2 billion, reflecting growth of 15% at unchanged exchange rates. The net reinsurance service result rose to €254.2 million from €243.2 million, so is on track to reach the full-year 2026 target of roughly €925 million.
L&H reinsurance’s operating result totalled €204.1 million in Q1’26, down on the prior year’s €253 million due to exchange rate effects and reduced contributions from investment income.
On the asset side of the balance sheet, Hannover Re’s portfolio of assets under own management was on a higher level than at the end of the previous year at €68.3 billion, with the portfolio “boosted” by a positive operating cash flow and currency effects. Investment income totalled €605.3 million, up on the prior year’s €576.9 million. The annualised return on investment reached 3.6%.
Clemens Jungsthöfel, Chief Executive Officer of Hannover Re, commented: “Hannover Re has made a successful start to the 2026 financial year. Our Group net income for the first quarter once again underscores the strength of our diversified business model and our ability to show attractive earnings growth even in a more challenging market. Thanks to our robust positioning in the market, very good capitalisation and lean cost structures, we enjoy considerable financial resilience. This forms the basis for further strengthening our sustained profitability going forward.”
Chief Financial Officer, Christian Hermelingmeier, commented: “Hannover Re is very robustly positioned – underpinned by our consistent risk and capital management. This is evident from the further increase in the resilience reserves in 2025 to the level of EUR 3.2 billion. The strong capital adequacy ratio similarly underscores our financial stability. Given the good quality of the business written, we again see potential scope in the current year to further boost our financial resilience, provided there are no distortions on the capital market or particularly sizeable large losses.”
Looking ahead, Hannover Re is expecting Group net income of at least €2.7 billion for the full-year 2026, with growth in P&C reinsurance revenue in traditional business expected to be in the mid-single-digit percentage range based on constant exchange rates. The P&C reinsurance combined ratio is anticipated to be less than 87%. In L&H reinsurance, Hannover Re anticipates a net reinsurance service result of roughly €925 million. Additionally, the return on investment is projected to reach around 3.5%.
Hannover Re explains that achieving these goals for 2026 is based on the premise that large loss expenditure does not significantly exceed the budgeted level of €2.3 billion, and assumes that there are no unforeseen distortions on capital markets.
“Even though price pressures still have the upper hand in property and casualty reinsurance, our superb positioning enabled us to significantly expand our book of business – especially in the 1 April renewals – in areas where our profitability requirements were met. Against this backdrop, we remain committed to our disciplined underwriting approach, prioritise the quality of our portfolio and focus on business that generates sustainable profits,” said Jungsthöfel.
