Hannover Re plots 2023 profit gain even as large loss seen growing apace

Reinsurer  Hannover Re ended 2022 at its forecasted group net profit of €1.4 billion and can ride a “continued favourable market environment” to a 2023 bottom line of €1.7 billion (under a new accounting standard) even while expecting an equivalent rise in its net major-loss budget.

Growth in the P&C book and “increased loss expectation from natural catastrophes” has driven a similar increase in the net major-loss budget for 2023 to €1.725 billion from €1.4 billion in 2022, the group said.

“Thanks to our position as a profitable and sought-after business partner and in light of the attractive market environment, especially in property and casualty reinsurance, we again expect a satisfying Group net income for the current financial year,” said CEO Jean-Jacques Henchoz.

Reinsurance revenue in 2023 is expected to grow by at least 5% at constant exchange rates.

“After the high burdens from major losses in the past years, we will stick to our conservative reserving policy in the current business year,” Henchoz noted.

For the year just closed, Hannover Re is claiming gross premiums adjusted for FX changes rose 12.7% and that the €1.41 billion in net income rendered a return on equity at 14.1%. The audited annual report is slated for publication March 9.

That result was said to have suffered from “high claims burdens” in P&C, but results in life and health came in “clearly above expectations” despite the continued drag from losses tied to the pandemic.

For 2023, return on investment from assets under own management should be at least 2.4%, a figure down from the 3.2% recorded for 2022.

Hannover Re said it will offer an ordinary dividend to at least match prior year payouts and could offer a special dividend, provided the group stays on track to its new profit target and capitalisation exceeds levels required for future growth.

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