Some highlights from Hannover Re’s latest financial results update;
Hannover Re posted a quarterly profit of EUR 264 million in the first three months and confirms its full-year earnings guidance. That was despite sizeable natural catastrophe claims, further pandemic-related losses in life and health reinsurance and additional strengthening of provisions for possible losses resulting from the war in Ukraine.
“While we are all appalled by the suffering that Russia has unleashed in its war on Ukraine, it is not yet possible to put a concrete figure on the economic impact at this point in time,” said Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re. “Along with the potential implications of the war in Ukraine, we faced numerous natural catastrophes and further pandemic-related strains in life and health reinsurance in the first three months of the year. Against this backdrop, we again demonstrated the quality of our risk and capital management and stood shoulder-to-shoulder with our clients as a reliable partner.”
Hannover Re’s capital adequacy ratio at the end of March was 242% and therefore remained comfortably above the limit of 180% and threshold of 200%.
Gross premium booked by Hannover Re grows by 19.5%The gross written premium booked by Hannover Re increased by 19.5% as of 31 March 2022 to EUR 9.3 billion (EUR 7.8 billion). Growth would have reached 13.9% adjusted for exchange rate effects. Net premium earned rose by 17.9% to EUR 6.7 billion (EUR 5.7 billion). Growth of 12.4% would have been booked at constant exchange rates.
Group net income reaches EUR 264 millionOperating profit (EBIT) reached EUR 396 million (EUR 404 million) despite the losses incurred in the first quarter. Group net income fell by 13.8% to EUR 264 million (EUR 306 million). Earnings per share stood at EUR 2.19 (EUR 2.54).
Property and casualty reinsurance: Major losses higher than expectedHannover Re was satisfied overall with the renewal of its property and casualty reinsurance portfolio as of 1 January 2022. 62% of the treaties in traditional property and casualty reinsurance were renegotiated on this date. The inflation- and risk-adjusted price increase amounted to 4.1%, with the biggest gains recorded in Europe.
Gross written premium grew by 26% as of the end of March to EUR 7.1 billion (EUR 5.7 billion); they would have risen by 19.5% adjusted for exchange rate effects. Net premium earned was up by 24% to EUR 4.8 billion (EUR 3.9 billion); the increase would have been 18.0% at constant exchange rates.
Expenditures for major losses reached a total of EUR 336 million (EUR 193 million) and thus exceeded the budgeted amount of EUR 284 million for the first quarter. The largest individual losses were the floods in Australia caused by heavy rainfall with net expenditure of EUR 186 million, the windstorm events Ylenia/Zeynep in Europe at a cost of EUR 124 million and the sinking of the cargo ship “Felicity Ace” following a fire with a loss of EUR 14 million.
Hannover Re established an additional general provision in the low triple-digit million euro range in the first quarter for possible losses from the war in Ukraine.