Hannover Re grows retro at January renewals, adds parametric earthquake cover

Large European reinsurer Hannover Re expanded its retrocession protections by around 17%, or EUR 200 million to EUR 1.4 billion at the January 1st, 2026, reinsurance renewals, with increased capacity for its capital markets backed K-Cessions quota share sidecar facility, and a new parametric earthquake cover.

Today, Hannover Re has reported total premium growth of 3.3% in the renewals of traditional property and casualty reinsurance at 1.1 2026, with an average risk-adjusted price decline of 3.2%.

While it was a highly competitive environment for sellers of protection, Hannover Re took advantage of market conditions to increase its retrocession protection at improved pricing, reporting a stable cession rate for proportional retro.

For 2026, the structure of Hannover Re’s natural catastrophe retro programme is unchanged from 2025, but has grown in size to roughly EUR 1.4 billion, with all three layers expanding when compared with the prior year.

At the bottom of the retro tower sits the K-Cessions quota share, which has increased in size by more than 31% to a significant USD 964 million, compared with USD 735 million in 2025. Above this sits the whole account excess of loss cover, sized at EUR 449 million for 2026, an increase of 4% when compared with EUR 434 million for the 2025 programme. At the top of the tower is Hannover Re’s aggregate excess of loss retro coverage, which has grown by 8% year-on-year to EUR 108 million for 2026 compared with EUR 100 million last year.

Hannover Re has also revealed its new parametric earthquake retro cover for 2026, although emphasises that it currently has only a small limit.

Overall, the German reinsurer benefited from improved pricing on proportional and non-proportional placements in line with the inwards market trend, with all retro placements seeing a greater number of partners for 2026. You can see Hannover Re’s retro programme for 2026 below.

At the 1.1 2026 reinsurance renewals, Hannover Re treaties up for renewal amounted to EUR 10.2 billion, which is 61% of its business in traditional property and casualty reinsurance, excluding facultative reinsurance, ILS business and structured reinsurance. The reinsurer renewed treaties with a volume of EUR 9.4 billion, opting to cancel treaties worth EUR 827 million. Combined with new treaties secured and restructured treaties, as well as changes in prices and treaty shares of EUR 1.2 billion, Hannover Re’s total renewed premium volume was EUR 10.535 billion.

Sven Althoff, a member of Hannover Re’s Executive Board with responsibility for property and casualty reinsurance, said, “While treaty terms and conditions remained largely stable, price declines were more pronounced than anticipated – especially in highly competitive lines and for contracts with a moderate loss experience.

“The price level is nevertheless above the multi-year average and remains commensurate with the risks. We therefore continued to profitably grow our portfolio by strengthening existing client relationships and developing new ones. Proportional programmes benefited from the growth of our clients’ underlying business. We also further improved our own retrocession protection.”

Premium volume in the Americas grew by 6.5% at the recent renewal, while premium growth in the Europe, Middle East and Africa region grew by 0.4%, and in the Asia Pacific region premium volume increased by 1.9%.

Hannover Re expanded its premium volume in specialty lines by 5.8% at the renewals in what it describes as a highly competitive market environment.

In the natural catastrophe business, the reinsurer notes that abundant capacity available in the market resulted in more intensive competition and risk-adjusted rate reductions of 10% to 20%, both in international markets and in the US, but adds that, overall, prices still remained adequate.

“The successful launch of Hannover Re Capital Partners served to strengthen cooperation with the capital market in the area of natural catastrophe covers,” explains the firm.

Hannover Re announced the launch of its Bermuda based insurance-linked securities (ILS) platform, Hannover Re Capital Partners, last year, and it seems the unit has now started writing business.

Further, Hannover Re saw continued demand for structured solutions at the most recent renewal, with the majority of contracts renewed and new treaty relationships established, despite the competitive environment.

Clemens Jungsthöfel, Chief Executive Officer of Hannover Re, said, “We booked profitable growth in a highly competitive market environment in the renewals at the start of the year. Our strong market position, long-standing and partnership-focused client relationships, as well as cost advantages were crucial factors.

“We were able to partially offset more significant price reductions in certain lines within our overall portfolio thanks to our broad positioning. In areas where business is profitable, we were able to add to our market shares. The quality of our written portfolio remains on a good level overall.”

Today, Hannover Re has also provided some preliminary full year 2025 figures, including reinsurance revenue of EUR 26.8 billion, and operating profit of EUR 3.5 billion, both increases on the prior year. The firm says that P&C reinsurance contributed EUR 2.6 billion to the operating result, while L&H reinsurance added EUR 900 million. Group net income increased to EUR 2.64 billion in 2025 from EUR 2.23 billion in 2024.

“With the January renewals behind us and following a successful 2025, we are looking ahead with confidence. Even in the face of increasing competition, our careful planning and strong market position consistently open up additional profitable opportunities for growth. Thanks to our conservative reserving in property and casualty reinsurance and the active realisation of losses in our investments, we have laid the foundation for achieving further sustained earnings growth over the coming years,” said Jungsthöfel.

The reinsurer has also confirmed its 2026 guidance, with the company expecting Group net income for the 2026 financial year of at least EUR 2.7 billion.