Hannover Rück (HNR1) CMD 2025 summary

Strategic direction and future plans

• No major changes in strategy or new financial guidance were announced; the current strategy cycle continues through 2026, with updates expected in November 2025.

• On track to exceed targets for the 2024–2026 strategy cycle, with 1H 2025 ROE at 23% and EBIT growth at 6.3% over prior periods.

• Focus remains on organic growth, leveraging strong client relationships and a lean, pure-play reinsurance model.

• Ongoing investment in automation and AI, streamlined IT, and a lean operating model drive efficiency, scalability, and cost advantages.

• M&A is not a priority; organic growth is expected to continue, especially in underweight markets and business lines.

Financial guidance and capital management

• The payout ratio is set to increase to around 55% of IFRS net income, transforming the special dividend into a regular component for a more predictable run rate.

• Solvency II ratio remains robust at 261% in 1H 2025, well above the 200% target, but is expected to trend lower due to growth assumptions while maintaining a buffer.

• Strong capital position and improved German GAAP balance sheet provide flexibility for growth and attractive dividends.

• Commitment to sustainable value creation and structurally higher capital returns to shareholders.

• Reserve resiliency in P&C and life and health remains high, supporting earnings stability and offering levers for future profit management.

Business developments and operational highlights

• Lean operating model delivers a cost ratio of 3.2% and high revenue per employee, outperforming peers.

• P&C: Continued appetite for growth in NatCat, with improved diversification and capital efficiency; strong client demand and a low-cost ratio support profitability even in softer markets.

• Life & Health: Reliable, increasing run rate with prudent assumption setting; CSM growth underpins future earnings, and new business opportunities are targeted in underweight regions.

• Investments: Attractive, stable returns with low volatility; book yield is expected to rise further as higher market yields are locked in, and hidden losses are being actively managed.

• Structured and ILS business lines are expected to continue growing, with structured business showing mid-20s growth rates and resilience through cycles.