Hannover Re, one of the four largest reinsurance companies in Europe, has a net profit increase of 13.4% in fiscal year 2025, reaching 2.6 billion euros. Reinsurance revenue increased by 1.5% year-on-year to 26.8 billion euros. Both the property and casualty insurance (P&C) and life and health (L&H) reinsurance sectors performed strongly.
At constant exchange rates, total revenue growth will be stronger at 4.7%, while net reinsurance services results will increase significantly by 15.8% to reach €3.5 billion in 2025.
At the same time, net reinsurance financing results (structurally negative, reflecting an increase in interest on discounted technical reserves in previous years) totaled -€1.4 billion in 2025, compared with -€1.1 billion in 2024. Monetary results improved to €243.2 million from -€108 million, and operating profit increased to €3.5 billion from €3.3 billion a year ago.
“Given the high profitability of its business, the full utilization of its large loss budget and the positive exchange rate results, Hannover Re is able to achieve growth in net profit while also significantly improving its profitability in the coming years. To this end, Hannover Re has further expanded the elasticity of its loss reserves and actively realized hidden losses in its portfolio,” the company explained.
As of the end of 2025, Hannover Re’s shareholders’ equity increased to 12.9 billion euros from 11.8 billion euros at the end of 2024, and the return on equity increased to 21.4%, which is much higher than the strategic goal of more than 14%.
Christian Hermelingmeier, Chief Financial Officer of Hannover Re, said: “By systematically realizing implicit losses in our investments and further extending the resilience of our loss reserves, we continue to significantly strengthen our financial soundness. In an increasingly challenging market environment, Hannover Re has the strongest balance sheet in its history. Our extremely strong solvency ratio further underlines our commitment to provide stable and reliable support to our customers.”
As of the end of December 2025, the capital adequacy ratio under Solvency II was 256%, compared with 261% in the same period last year.
In the Property & Casualty Reinsurance segment, net charges for large losses totaled €1.725 billion in fiscal 2025, which was higher than the €1.629 billion in the previous year but below the full-year budget forecast of €2.1 billion. Hannover Re’s largest net cost was the California wildfires, which cost €595 million, followed by Hurricane Melissa, which cost €329 million, the earthquake in Myanmar, which cost €118 million, and the severe hail that affected Australia in November, which cost €102 million.
However, Hannover Re said it expected reserve elasticity to increase to about 3.2 billion euros, more than enough to offset healthy and large losses.
Property and casualty net new business CSM grew by 12.1% to €3.1 billion in 2025, driven by favorable results from treaty renewals throughout 2025 and the reinsurer’s profit-focused underwriting approach. Total property and casualty reinsurance revenue will increase by 0.6% to €18.8 billion in 2025, but at constant exchange rates the growth rate will be 3.8%.
Property and casualty insurance net reinsurance services performance will increase from 2.1 billion euros in 2024 to 2.6 billion euros in 2025, with the combined ratio increasing from 86.6% to 84%. Operating profit in the P&C business will reach €2.6 billion in 2025, up from €2.4 billion in the previous year.
Hannover Re stressed that despite fierce competition, demand for its L&H reinsurance business continued to grow, with new generation CSM increasing from 624.1 million euros to 766.4 million euros. However, net contract services margin fell from 6.5 billion euros to 6.3 billion euros, failing to achieve the full-year 2% growth target.
L&H total reinsurance revenue will increase from €7.7 billion in 2024 to €8.0 billion in 2025, a growth rate of 6.8% at constant exchange rates. The division’s net reinsurance services performance increased to €903 million from €882.9 million, above the current year’s target of €875 million. L&H Reinsurance operating results fell 5.1% year-on-year to 886.1 million euros.
On the asset side of the balance sheet, investment income totaled €1.7 billion in 2025, down from €2.0 billion in the previous year, with a return on investment of 2.5%, below the guidance target return of around 2.9%. This was mainly due to strategic motivations to proactively realize implicit losses in the €593 million fixed income portfolio to enhance future returns.
Clemens Jungsthöfel, Chief Executive Officer of Hannover Re, commented: “Hannover Re stands for reliability and financial strength. We achieved higher earnings guidance for 2025 while taking advantage of another successful financial year to take strategic actions aimed at significantly strengthening our future profitability. With a further significant increase in the proposed dividend and a higher payout ratio, our shareholders are also more involved than ever in Hannover Re’s success.”
Today, Hannover Re also confirmed its guidance for fiscal 2026, including group net profit of €2.7 billion, property and casualty reinsurance revenue growth in the mid-single-digit percentage range in its legacy business, a combined ratio below 87%, and reinsurance services results in L&H of approximately €925 million. The return on investment in 2026 is expected to be around 3.5%.
Hannover Re added that achieving its 2026 profit guidance assumes that large loss expenses do not significantly exceed the budgeted level of 2.3 billion euros and that there are no unforeseen distortions in the capital markets.
Jungsthöfel said: “With our solution-oriented, pragmatic ‘make a difference’ approach, we will continue to be a strong and reliable partner for our customers. With our proven strengths and strong balance sheet, as well as the additional steps we have taken to strengthen our resilience, we are best positioned to achieve attractive profitable growth even in challenging markets in 2026 and beyond.”
Hannover Re’s net profit will rise to €2.6 billion in 2025 as increased reserve flexibility offsets the impact of benign losses.
