Hannover Re plans to renew similar retro structures for 2027, in line with growth: Althoff

Hannover Re is looking towards its renewal of retrocessional protection for 2027 with a plan to place similar structures to the current program, while it seems there could be some increase given the underwriting growth of the company.

Speaking today during a nine month earnings call, Sven Althoff, Member of the Executive Board for Property & Casualty at Hannover Re, explained that the retrocession is likely to be another consistent placement for the company.

Each year, Hannover Re renews retrocessional reinsurance to cover natural catastrophe and major losses, with a range of structures utilised to tap both traditional and alternative capital sources.

For the current calendar year, Hannover Re expanded its retrocession protection by around 17%, or EUR 200 million to EUR 1.4 billion at the January 1st, 2026, reinsurance renewals. Within this was increased capacity for its capital markets backed K-Cessions quota share sidecar facility, and a new parametric earthquake cover.

This morning, when asked about the retro renewal, Althoff explained, “We are planning to place very similar retro structures in line also with the underlying growth of our business, so no changes intended on that side.”

Hannover Re has been growing this year, so this does suggest that the retro program could increase in size for 2027.

In addition, the reinsurer sponsored its latest retro catastrophe bond in July this year, which further expands its protection on a multi-year basis. Find details of Hannover Re’s directly sponsored catastrophe bonds in our extensive Deal Directory.

Althoff was also asked about the potential for further underwriting growth into property catastrophe reinsurance at the January 2027 renewals and said that it will depend on market conditions.

On this he stated, “When it comes to future growth on the nat cat side, we have created the headroom to potentially add further growth on the national cat side, but given that we don’t know how the renewal is turning out at this stage, it’s not an area which we will definitely grow.

“We have only created the headroom in case we find the market conditions attractive to have further growth on the nat cat side, but it’s too early to to give you an outlook on that side.”

Althoff also commented on the Colombia earthquake loss event that occurred in August this year, on which Hannover Re reported a gross loss of EUR 222.1 million and a net loss of EUR 215.7 million.

Althoff’s comments indicate that the reinsurers retrocession has helped reduce the gross loss.

He explained, “Right now, we only have some of our retro protection correspond on the Colombian loss, given its size. In case this should move out on a gross basis, there will be additional recoveries also from our event tower. So from that point of view, the development on a net basis should be slower compared to the gross basis, but only in case it does further develop.”

Also worth highlighting from Hannover Re’s nine month earnings call, CEO Clemens Jungsthöfel commented on market conditions, saying, “The overall loss environment in P&C reinsurance has been benign, and together with the overall increase in reinsurance capacity in the market, this has clearly intensified competition in P&C reinsurance.

“Nevertheless, reinsurance rates do remain risk adequate on a broad basis, we have therefore continued to expand our portfolio on a diversified basis, highlighting our strong ability to grow the business.”

CFO Christian Hermelingmeier highlighted that some of the additional growth in 2026 has come via Hannover Re’s work in the insurance-linked securities (ILS) market.

He stated, “We recorded additional growth in structured reinsurance and ILS, partly offsetting the reduction in volume from large individual treaties renewed at the beginning of the year.”

Also read: Hannover Re P&C Re operating profit +20.2% despite pricing. EUR 29m losses shared with ILS.