Hannover Re is encouraged by the negotiations on new contracts with primary insurers and brokers at the turn of the year.

Adjusted for risk and inflation, prices in non-life reinsurance rose by 2.3 percent, the world's third-largest reinsurer announced on Wednesday. This is a good basis for the current year, said CEO Jean-Jacques Henchoz: "The significantly improved profitability of our reinsurance business ensures our resilience in a volatile environment." He confirmed the goal of increasing net profit to at least 2.1 billion euros in 2024.

In the past year, Hannover Re exceeded its target by around EUR 100 million with a net profit of EUR 1.8 billion (2022: EUR 0.78 billion). Reinsurance turnover rose to 24.4 (24.1) billion euros. Henchoz took the opportunity to increase the loss buffers more than planned. "This gives us additional balance sheet strength for more challenging times," he said. "We have become somewhat more conservative." Hannover Re was able to afford this thanks to a special effect that caused the tax rate to shrink to a minimal 1.4 percent (2022: 22.7 percent). This was due to the introduction of global minimum taxation, which affects the tax rate in Bermuda. Like many reinsurers, the Group has based part of its business in the tax haven in the Caribbean.

The increase in reserves meant that the operating profit (EBIT) for 2023 was below analysts' expectations at EUR 1.97 (1.52) billion. In non-life reinsurance alone, there was a shortfall of half a billion compared to estimates. However, this did not bother the stock market much: the Hannover Re share rose by 1.3 percent to EUR 67.25 on Wednesday.

The subsidiary of the Talanx insurance group used the January renewals to increase its premium volume by 6.9 percent to 10.2 billion euros. January is the most important date for the annual negotiations with clients. At Hannover Re, 62 percent of business in traditional property and casualty business was up for renewal. "We are satisfied with the result of the renewals", said Henchoz. Overall, prices did not rise as sharply as in previous years. However, demand was higher and customers had remained loyal to traditional reinsurers. The industry always fears that hedge funds and similar providers could flood the market and depress prices.

(Report by Alexander Hübner, edited by Myria Mildenberger. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)