Global reinsurer Hannover Re saw its Group net income rise from $1.3 billion last year to $1.4 billion in the first half of 2026, as operating profit increased by almost 10% to €1.9 billion, with an improved property and casualty (P&C) combined ratio of 83.2%.
Hannover Re says that it delivered a “very good half-year result in an increasingly challenging market landscape”, and is confident of still being on track to meet its full year 2026 earnings guidance of at least €2.7 billion.
In H1’26, Group reinsurance revenue fell by 3.1% to €12.9 billion, although growth would have been 0.7% at unchanged exchange rates. Underwriting profitability was strong with a Group reinsurance service result of €1.7 billion, up on the prior year’s €1.4 billion.
Shareholders’ equity amounted to €13.3 billion as at 30 June 2026 compared with €12.9 billion as at 31 December 2025, as the annualised return on equity came down to 21.5% from 23%.
The net contractual service margin, which quantifies the unearned future profit embedded in the business written, rose by 11.4% to €8.8 billion in the first six months of the year, compared with €7.9 billion at the end of December 2025.
Turning to the P&C reinsurance business, the net new business CSM decreased by 13.3% year-on-year to €1.7 billion, driven by price declines in the most recent rounds of renewals as well as exchange rate effects, partially offset by volume growth due to increased new business.
At the June and July renewals, parts of the company’s North American portfolio, especially natural catastrophe risks, are traditionally renewed, as well as business from Australia and New Zealand, and in the credit and surety lines. This year, Hannover Re grew its book by 12.3% to a volume of €4.24 billion, although prices on the renewed business retreated by 4.5% on an inflation and risk-adjusted basis. Year-to-date, Hannover Re recorded renewals growth of 7.2%, and the firm says that despite an overall risk-adjusted price change of -3.9%, reinsurance rates remain adequate.
Back to the H1’26 P&C performance, and gross reinsurance revenue decreased by 8% year-on-year to €8.8 billion from €9.5 billion in H1’25, although a decrease of 3.9% would have been booked at unchanged exchange rates.
Within P&C, large loss costs in the first half of the year amounted to €784.7 million, which is down on last year’s €976.1 million, and below the budget of €1.024 billion for the period.
“The largest net individual losses from natural catastrophes for Hannover Re were Winter Storm Fern in the United States and Canada at the start of the year in an amount of EUR 130.4 million, the severe Atlantic windstorms that impacted the Iberian Peninsula and Morocco to the tune of EUR 126.4 million as the year got underway and the June earthquake in Venezuela, for which an amount of EUR 75.0 million has initially been reserved,” explains the reinsurer.
Additionally, Hannover Re has now set aside around €200 million for potential impacts of the war in Iran. The firm also made provision for additional risks in the reporting period, and further strengthened the resilience of its loss reserves.
The P&C net reinsurance service result rose to €1.3 billion in H1’26 from €975.1 million in H1’25, while operating profit increased by 17.7% to €1.5 billion, and the combined ratio strengthened to 83.2% from 88.4%, therefore beating the full year target of less than 87%.
Hannover Re’s life and health (L&H) reinsurance business developed as anticipated in the first half of 2026, as net new CSM generation increased to €384.8 million from €364.7 million last year. The net CSM increased by 6.1% from the end of December 2025 to €6.7 billion, and would have increased by 3.6% adjusted for exchange rate effects.
L&H gross reinsurance revenue rose by 9.1% year on year to €4.1 billion in H1’26, and growth of 12.1% would have been recorded at constant exchange rates. The segment’s net reinsurance service result totalled €478 million in H1’26, an increase of 7.5% on the prior year’s €444.5 million. The operating result in L&H reinsurance declined by 13.1% to €408.2 million, compared with €469.9 million a year earlier.
“We can look back on a successful six months. Our partnership-based approach and lean organisation remain pivotal in our ability to operate successfully in an increasingly challenging market environment. It is precisely for this reason that we were able to selectively acquire further market shares side-by-side with our clients in the first half-year,” said Clemens Jungsthöfel, Chief Executive Officer.
On the asset side of the balance sheet, Hannover Re’s investment result increased to €1.3 billion in H1’26 from €1 billion in H1’25, as the annualised return on investment reached 3.7%, surpassing the full year target of around 3.5%.
“Our investment result and further strengthening of the interest rate level in our asset portfolio in 2025 through the realisation of unrealised losses played a major part in Hannover Re’s profitability. With our robust capital base and disciplined capital management, we are able to offer stability and create sustainable value even across market cycles,” said Christian Hermelingmeier, Chief Financial Officer.
Looking ahead, Hannover Re expects Group net income to amount to at least €2.7 billion for the 2026 financial year, a combined ratio of less than 87% in P&C, a net reinsurance service result of roughly €925 million in L&H, with a return on investment of around 3.5%.
The earnings guidance for 2026 is based on the premise that large loss expenditure does not significantly exceed the expected level of €2.3 billion, and that there are no unforeseen distortions on capital markets.
“The very good half-year result puts Hannover Re in an excellent position. Taken together with our resilience, which we again strengthened considerably in the previous year, and our lean operating model, I am looking to the full 2026 financial year and our long-term profitability with confidence,” added Jungsthöfel.
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