Hannover Re has reported a group net income of €480 million for Q1 2025, marking a 13.9% year-on-year decline, primarily driven by large losses in property and casualty reinsurance, which totalled €765 million and significantly exceeded the budgeted expectation of €435 million.
The most substantial individual loss stemmed from the California wildfires, which cost Hannover Re €631 million. Other notable losses included a mid-air collision between a passenger plane and a helicopter over Washington, D.C. (€29 million), an earthquake in Myanmar (€25 million), and a refinery fire in southern Germany (€20 million). Additionally, Cyclone Alfred, which struck Australia in March, resulted in a loss of €17 million.
With this in mind, the reinsurance service result in the firm’s property and casualty reinsurance segment fell by 46.6% to €272 million in Q1 2025, and the combined ratio rose to 93.9%, compared to 88% in the same period last year.
Clemens Jungsthöfel, Chief Executive Officer, commented, “The devastating wildfires in California are another example of how climate change is exacerbating the risks of extreme weather events.
“The expenditures for the wildfires put us significantly above the large loss budget for the first quarter. At the same time, our underlying business has continued to develop favourably, and we are therefore confident of achieving our full-year targets.”
Group-wide, gross reinsurance revenue increased by 4.5% to €7 billion in Q1 2025. In the property and casualty segment, gross revenue rose by 7.2% to €5.1 billion, while the life and health segment saw a modest decline of 2.4% to €1.88 billion.
Hannover Re’s total reinsurance service result (net), which reportedly reflects underwriting profitability after deductions for ceded business such as retrocessions and insurance-linked securities, fell by 28.5% to €515 million.
Despite the challenging quarter, the new business contractual service margin (CSM) in property and casualty reinsurance grew by 5.8% to €1.54 billion, and in the life and health segment, it rose to €132 million.
Shareholders’ equity increased to €12.1 billion in Q1 2025, up from €11.8 billion at the end of December 2024. The annualised return on equity stood at 16.1%, exceeding the firm’s strategic target of 14%.
Christian Hermelingmeier, Chief Financial Officer of Hannover Re, commented, “Hannover Re stands for stability and resilience thanks to our excellent risk and capital management.
“This is predominantly reflected in our consistently robust capital adequacy ratio. In addition, we further strengthened the resilience of our loss reserves from €2.1 billion to €2.5 billion in the 2024 financial year, as confirmed by a recent external audit.
“Even in particularly challenging times, we are thus able to stand shoulder to shoulder with our clients as a reliable reinsurance partner.”
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