Third-party capital more than just complementary capacity for Hannover Re: Althoff

Sven Althoff, Member of the Executive Board for Property & Casualty at Hannover Re, has said that third-party capital is certainly part of the reinsurer’s strategy, describing it as more than just complementary capacity, whilst also adding that it is creating opportunities for Hannover Re.

Althoff made these remarks during a recent webinar briefing presented by broker Aon that focused on capital and growth in reinsurance and the insurance-linked securities sector.

During the webinar, Althoff was asked whether he sees third-party capital as competition, complementary capacity or an integral part of Hannover Re’s own capital strategy.

Althoff outlined that while third-party capital is a competitor in some respects, Hannover Re sees it as being more of a partner and opportunity to grow its business further.

“Obviously it’s one source of competition, but we would really see more the partnership and the opportunity side of it. Whether that’s on our own capital planning and for that purpose, of course, retrocession is an is an important tool for Hannover Re to steer volatility,” Althoff said.

“We have been partnering up with ILS capital for a very long time, almost on all the property towers we are placing, whether that’s event, aggregate, or quota there. So, very instrumental partnerships in that respect,” Althoff explained.

Beyond using ILS capital for its own protection, Althoff highlighted the range of services and vehicles Hannover Re offers to the broader ILS space.

“We have a dedicated unit offering services for the ILS market, whether it’s collateralized fronting, it’s transformation of cat bonds, where very often Hannover Re is involved in some shape or form.

“We have our own investment vehicle investing into the cat bond space. The latest addition is the creation of Hannover Re Capital Partners, an agency writing portfolios on behalf of investors according to their risk appetite,” Althoff said.

Recall that Hannover Re launched its Hannover Re Capital Partners operation at the beginning of 2026 and in advance of that had also explained the rationale as putting in place a missing piece of Hannover Re’s ILS offering.

We also previously reported that Hannover Re Capital Partners (HCP) started writing business at the January 1st 2026 reinsurance renewals.

During Hannover Re’s media briefing at RVS 2026 in Monte Carlo, Hannover Re Executive Board Member Silke Sehm announced that Hannover Re Capital Partners, successfully wrote additional non-proportional catastrophe business in 2026 under its first third-party capital mandate, with a lower three-digit million number of capital raised.

In addition, just last week we reported that Hannover Re Capital Partners has established a new fund and SPI transformer structure in Bermuda, as it continues to build-out the ILS investment platform.

Althoff continued: “All of those parts are growing nicely and strongly and from that point of view, it’s certainly part of our strategy. It’s more than just complementary capacity. It’s creating opportunities for us, and of course, it’s evolving.

“If you look at casualty ILS, that’s an area where we are not playing at this moment in time. But it just shows how the market is evolving, whether or not we are playing. It’s more than just property cat we are talking about these days.”

In addition, Althoff also explained that Hannover Re’s growth in recent years has particularly come from natural catastrophe business, its structured reinsurance practice and the company’s ILS activities, emphasising that growth is driven by client demand.

Looking three to five years ahead, Althoff said that if major losses stay within expected annual losses, “we will see growth both from the traditional side and the alternative capital side,” adding that “hopefully we will offer attractive solutions at also attractive prices to lower the protection gap.”

The executive cautioned, however, that “if we should have a lot of volatility, or we should have this disruption in the capital market, then the journey can be a completely different one.”

“So, from that point of view, I would say it’s important that you keep agile and react to the circumstances and keep working on your competitive advantages,” Althoff added.

Also read:

– ILS should be seen as a source of ‘strategic possibility’ not just capital: Aeolus’ Dutt

– Investors should consider ILS for diversification and strong risk-return profile: PGGM’s Takken-Somers