Hannover Re, one of Europe’s big four reinsurers, delivered a 13.4% rise in net income to €2.6 billion for the 2025 financial year, as reinsurance revenue increased by 1.5% year-on-year to €26.8 billion, with a strong performance in both the property and casualty (P&C) and life and health (L&H) reinsurance segments.
Gross revenue growth would have been even stronger at 4.7% at constant exchange rates, while the net reinsurance service result rose by a significant 15.8% to €3.5 billion in 2025.
At the same time, the net reinsurance finance result, which is structurally negative and reflects the interest accretion on technical reserves discounted in prior years, totalled -€1.4 billion in 2025, compared with -€1.1 billion in 2024. The currency result improved to €243.2 million from -€108 million, as operating profit increased to €3.5 billion from €3.3 billion a year earlier.
“Given the high profitability of its business, underutilisation of the large loss budget and a positive currency result, Hannover Re was able to deliver increased net income while also significantly boosting its earnings power for future years. To this end, Hannover Re further expanded the resilience of its loss reserves and actively realised hidden losses in its investment portfolio,” explains the firm.
Hannover Re’s shareholders’ equity amounted to €12.9 billion as at the end of 2025, up from €11.8 billion at the end of 2024, as the return on equity improved to 21.4%, which is well above the strategic target of more than 14%.
“Through systematic realisation of hidden losses in our investments and by further expanding our resilience in the loss reserves, we have continued to significantly reinforce our financial soundness. In an increasingly challenging market landscape, Hannover Re is thus equipped with the strongest balance sheet in its history. Our commitment to supporting our clients with stability and reliability is further underscored by our extremely robust solvency ratio,” said Christian Hermelingmeier, Chief Financial Officer of Hannover Re.
The capital adequacy ratio under Solvency II stood at 256% at the end of December 2025, compared with 261% a year earlier.
Within the P&C reinsurance arm, net expenditures for large losses in the 2025 financial year totalled €1.725 billion, which while up on the prior year’s €1.629 billion, is below the full-year budgeted expectation of €2.1 billion. The largest net cost for Hannover Re were the California Wildfires at €595 million, followed by Hurricane Melissa at €329 million, the earthquake in Myanmar at €118 million, and €102 million from the severe hailstorms that impacted Australia in November.
However, an expected increase in reserve resiliency to roughly €3.2 billion more than offset the benign large-loss experience, says Hannover Re.
The P&C net new business CSM increased by a considerable 12.1% to €3.1 billion in 2025, driven by the favourable outcome of the treaty renewals throughout 2025 and a profitability-centred underwriting approach by the reinsurer. P&C reinsurance revenue, gross, increased by 0.6% to €18.8 billion in 2025, but would have been 3.8% growth at constant exchange rates.
The P&C net reinsurance service result increased to €2.6 billion in 2025 from €2.1 billion in 2024, as the combined ratio strengthened to 84% from 86.6%. Operating profit in the P&C business hit €2.6 billion in 2025, an increase on the prior year’s €2.4 billion.
Hannover Re highlights sustained demand across its L&H reinsurance business despite intense competition, as the new CSM generation increased to €766.4 million from €624.1 million. However, the net contractual service margin fell to €6.3 billion from €6.5 billion, so failed to reach the growth target of 2% for the year.
L&H gross reinsurance revenue rose to €8 billion in 2025 from €7.7 billion in 2024, and growth would have been 6.8% at unchanged exchange rates. The segment’s net reinsurance service result rose to €903 million from €882.9 million, which is above the target of €875 million for the year. The L&H reinsurance operating result declined by 5.1% year-on-year to €886.1 million.
On the asset side of the balance sheet, investment income totalled €1.7 billion in 2025, down on the prior year’s €2 billion, as the return on investment reached 2.5%, which is below the guided target return of around 2.9%, driven mostly by the strategically motivated active realisation of hidden losses in the fixed-income portfolio of €593 million to boost future earnings.
Clemens Jungsthöfel, Chief Executive Officer of Hannover Re, commented: “Hannover Re stands for reliability and financial strength. We achieved our increased earnings guidance in 2025 and at the same time made the most of another successful financial year to take strategic actions aimed at significantly reinforcing our future profitability. With a further substantial increase in the proposed dividend and the higher payout ratio, our shareholders are also participating more than ever in Hannover Re’s success.”
Today, Hannover Re has also confirmed its guidance for the 2026 financial year, including group net income of €2.7 billion, P&C reinsurance revenue growth of in the mid-single-digit percentage range in traditional business with a combined ratio of below 87%, and a reinsurance service result in L&H of roughly €925 million. The return on investment in 2026 is excepted to reach around 3.5%.
Hannover Re adds that the achievement of the earnings guidance 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.
“With our solution-driven and pragmatic ‘somewhat different’ approach, we continue to be a strong and reliable partner for our client. Thanks to our proven strengths and robust balance sheet, and with the additional steps taken to increase our resilience, we are optimally placed to deliver attractive earnings growth even in a challenging market – in 2026 and beyond,” said Jungsthöfel.
