Latest results from Hannover Re show an increased profit in the first quarter of 2023, with the Group net income guidance for the full financial year remaining on track, says the company.
“With the result for the first three months we have achieved more than a quarter of the full-year guidance of at least EUR 1.7 billion and are thus very much on course,” said Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re. “At the same time, we have further strengthened our resilience. In the face of the current challenges we are thereby remaining a reliable partner for our clients.”
Hannover Re is reporting its results for the first time based on the new financial reporting standards IFRS 17 and IFRS 9, both of which have been applicable since 1 January 2023.
Group net income rises to EUR 484 million
Reinsurance revenue remained broadly unchanged at EUR 6.6 billion (previous year: EUR 6.6 billion). A decline of 0.9% would have been booked at constant exchange rates. The new business value (net) increased to EUR 1.5 billion (EUR 1.0 billion).
The reinsurance service result, reflecting the profitability of underwriting activity including business ceded (primarily retrocessions and insurance-linked securities), climbed by 35% to EUR 568 million (EUR 421 million). The reinsurance finance result amounted to EUR – 167 million (EUR -122 million) adjusted for exchange rate effects.
The operating profit (EBIT) increased by 21% to EUR 720 million (EUR 598 million). Group net income was up by 13% at EUR 484 million (EUR 428 million). Earnings per share thus amounted to EUR 4.02 (EUR 3.55).
Return on equity of 20.8% remains above minimum target; continued robust capital adequacy ratio under Solvency II
The shareholders’ equity of Hannover Re as at 31 March 2023 totalled EUR 9.5 billion (31 December 2022: EUR 9.1 billion). The annualised return on equity amounted to 20.8% (previous year: 16.8%) and outperformed the minimum target of 1,000 basis points above the risk-free interest rate. The book value per share stood at EUR 79.03 (31 December 2022: EUR 75.12).
The contractual service margin (CSM) surged by an appreciable 13% to EUR 7.4 billion (31 December 2022: EUR 6.6 billion). The increase was driven largely by the very positive new business value. The risk adjustment increased by 2.9% to EUR 3.8 billion (31 December 2022: EUR 3.7 billion).
The capital adequacy ratio under Solvency II, which measures Hannover Re’s risk-carrying capacity, amounted to 261.2% at the end of March and thus remained comfortably above the limit of 180% and the internal threshold of 200%.
You can get more details on the results at the Hannover Re press office by the way.