Hannover Re grows, shares few losses with ILS, says price pressures have upper hand in P&C

Hannover Re reported a 48% increase in group profit for the first-quarter of 2026, revealing renewals growth of 5.6% for the year so far, while acknowledging that price pressures have the upper hand in property and casualty reinsurance.

The global reinsurance company reported strong net income for Q1 2026, as the quarter saw large losses come in well under budget.

Thanks to that, Hannover Re has reported only sharing EUR 17 million of its large losses with insurance-linked securities (ILS) capital partners in the period, a significantly lower figure than in the prior year Q1.

Recall that, in the first-quarter of 2025, Hannover Re ceded EUR 438 million of its large natural catastrophe losses with insurance-linked securities (ILS) capital sources, with the California wildfires the main natural event that drove cessions to its capital partners.

For Q1 2026, the large loss burden only came out at EUR 207 million net, well-below the budgeted amount of EUR 480 million. The combined ratio was just 83.6%, so well below the prior year and better than the full-year target of less than 87%.

The biggest large losses were natural catastrophe events in Q1 2026, with Winter Storm Fern in the United States and Canada driving EUR 124.8 million, while Atlantic windstorms Kristin and Leonardo causing losses of EUR 34 million on the Iberian Peninsula and in Morocco.

As a result, the ILS investors Hannover Re works with took very few losses from the company during Q1 2026.

Hannover Re’s group net income rose 48% to EUR 710.6 million for the first-quarter, but the effects of a softening market are evident in the results.

Hannover Re’s gross reinsurance revenue was EUR 6.5 billion for Q1, down from the previous year’s EUR 7 billion. However, at constant exchange rates the reinsurer said this would have grown by 0.6% in 2026.

But the net reinsurance service result, which reflects the profitability of underwriting minus business ceded largely to retrocessions and insurance-linked securities, rose significantly by 72.9% to EUR 890.2 million in Q1 this year.

Hannover Re maintains its target for revenue growth in P&C reinsurance, helped by premium growth of 18.8% at the April renewals.

Operating profit for the group rose over 39% to EUR 971.1 million for the quarter, while return on equity smashed the strategic target of 14%, being reported at 21.2% for Q1 2026.

Clemens Jungsthöfel, Chief Executive Officer, said, “Hannover Re has made a successful start to the 2026 financial year. Our Group net income for the first quarter once again underscores the strength of our diversified business model and our ability to show attractive earnings growth even in a more challenging market. Thanks to our robust positioning in the market, very good capitalisation and lean cost structures, we enjoy considerable financial resilience. This forms the basis for further strengthening our sustained profitability going forward.”

At the April reinsurance renewals Hannover Re reports “stable or slightly softer conditions at continued adequate prices”, with the 18.8% premium volume expansion coming alongside a risk-adjusted price decline of 3.6% for the renewed business.

In the Americas, Hannover Re said, “Pricing remains adequate despite moderate softening in US property.”

The reinsurer also explained that, “Nat Cat business remains adequately priced with stable retention levels and unchanged terms & conditions.”

The company also highlighted that rates are decreasing across APAC markets, with loss free non-proportional property reinsurance moving fastest.

In estimated premium income terms, Hannover Re said the inforce book up for renewal was EUR 1.770 billion, while after premium growth it estimates it has renewed EUR 2.102 billion of premium through April 1st.

CEO Jungsthöfel said, “Even though price pressures still have the upper hand in property and casualty reinsurance, our superb positioning enabled us to significantly expand our book of business – especially in the 1 April renewals – in areas where our profitability requirements were met. Against this backdrop, we remain committed to our disciplined underwriting approach, prioritise the quality of our portfolio and focus on business that generates sustainable profits.”