HANNOVER RE 
"Profitability is secured for the long term," said CEO Jean-Jacques Henchoz on Monday, referring to the significantly increased loss reserves. The world's third-largest reinsurer has used a positive tax effect in 2023 to increase its reserves for future claims far beyond the normal level. "We have positioned ourselves for the future," said CFO Clemens Jungsthöfel at the annual press conference. Despite this, net profit more than doubled to 1.8 (0.8) billion euros in the past year. It is set to rise by a further 15 percent to 2.1 billion in 2024.
Shareholders, above all the majority shareholder Talanx, will benefit from the jump in profits with a higher dividend. Hannover Re intends to pay a fifth more for the past year: 7.20 (2022: 6.00) euros per share, 1.20 (1.00) euros of which as a special dividend. This temporarily pushed the DAX-listed share price up 1.3 percent to an all-time high of 247.90 euros.
The figures of the Talanx subsidiary reflected an extremely low tax burden, but also an unexpectedly good result from its own investments. On balance, Hannover Re paid only EUR 26 million in taxes in 2023, half a billion less than in 2022. This was partly due to the fact that a large proportion of profits were generated in tax havens and partly to the introduction of a corporate income tax in Bermuda, from where the Group operates its natural catastrophe business. This resulted in a special tax income of 200 million dollars, said Jungsthöfel. "The special tax effect has given us the leeway to further expand our resilience."
As a result, the operating result (EBIT) of 1.1 billion euros in the claims segment fell half a billion short of the company's own expectations, although major claims remained within budget at 1.6 (1.7) billion euros. The largest losses were the floods in northern Italy, followed by the earthquake in Turkey and Syria. Hannover Re made up for this with an increase in the result from its own investments to EUR 1.6 (0.96) billion. At 2.8 (2.4) percent, the return on investments was significantly higher than planned. "The rise in interest rates is slowly finding its way into our figures," said Jungsthöfel. Only 80 million euros were written off on the real estate portfolio of 3.7 billion euros, mainly for offices in the USA. Hannover Re was not affected by the bankruptcy of the Austrian Signa Group, said the CFO.
Outgoing Executive Board member Michael Pickel expects prices in property and casualty reinsurance to continue to rise. "We will continue to see the hard market. We have sufficient capacity in the market, but not too much." However, premium increases are unlikely to be as high as in 2023, when insurers had difficulty obtaining sufficient reinsurance cover. At 1.825 billion euros, Hannover Re has budgeted 100 million euros more for major losses.
(Report by Alexander Hübner, edited by Ralf Banser. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
