Hannover Rück (HNR1) Q2 2024 earnings summary

Executive summary

• Net income rose 20.9% year-over-year to €1,161 million, with return on equity at 22.3% and strong P&C reinsurance and investment performance.

• Reinsurance revenue increased 5.2% to €12,916 million, with P&C revenue up 8.8% and life & health revenue down 2.3%.

• Combined ratio improved to 87.8%, reflecting disciplined underwriting and manageable large loss expenditures.

• Investment return reached 3.3%, exceeding targets, with investment result up 18.7% year-over-year.

• The company remains on track to achieve full-year targets despite ongoing climate, geopolitical, and market risks.

Financial highlights

• Operating profit (EBIT) increased 22.5% to €1,657 million, supported by strong investment income and prudent reserving.

• Shareholders' equity rose 5.3% to €10.7 billion, mainly due to retained earnings after dividend distribution.

• Large losses of €566 million in H1 2024 were below the budgeted €801 million.

• Book value per share increased to €88.45 from €83.97 at year-end 2023.

• Earnings per share rose to €9.63 from €7.96 in H1 2023.

Outlook and guidance

• 2024 guidance reaffirmed: net income ≥€2.1 billion, P&C combined ratio <89%, reinsurance revenue growth >5%, and ROI ≥2.8%.

• Life & health reinsurance service result expected above €850 million.

• Confidence in achieving or exceeding targets has increased, but caution remains due to hurricane season and capital market risks.

• Ordinary dividend expected to increase over the 2024–2026 strategy cycle, with potential for special dividends.

• Mid-year P&C renewals saw premium growth of 11.5% and risk-adjusted price increase of 1.3%.