Hannover Re delivered robust financial performance in the 2025 fiscal year, with group net income rising sharply by 13.4% to EUR 2.6 billion despite challenging market conditions. The company's success demonstrates the importance of strategic financial management in the reinsurance sector, where stability and profitability directly impact global risk coverage and economic security. This performance matters because Hannover Re's financial strength enables it to provide reliable protection against catastrophic events worldwide, from natural disasters to health crises.
The company's property and casualty reinsurance division reported a good result with increased resilience in loss reserves, with net expenditures for large losses totaling EUR 1,725 million, coming in below the full-year budgeted expectation of EUR 2.1 billion. The largest expenditures for individual losses included the California wildfires at EUR 595 million, Hurricane Melissa at EUR 329 million, the Myanmar earthquake at EUR 118 million, and severe Australian hailstorms at EUR 102 million. This below-budget performance in a year with significant natural disasters highlights the company's effective risk management, which benefits clients and policyholders by ensuring claims can be paid even during periods of multiple catastrophic events.
Life and health reinsurance also performed well, with the reinsurance service result beating guidance at EUR 903.0 million, surpassing the target of more than EUR 875 million. This sustained demand across all segments of life and health reinsurance, despite intense global competition, indicates the ongoing importance of reinsurance in supporting healthcare systems and life insurance providers worldwide. The company's financial documents, including the financial supplement, are available at https://www.hannover-re.com/en/investors/results-and-reports/#2025.
Hannover Re's return on equity reached 21.4%, clearly surpassing the strategic target of more than 14%, while the return on investment was 2.5%, primarily due to the active realization of hidden losses in the fixed-income portfolio to boost future earnings. Chief Financial Officer Christian Hermelingmeier noted that through systematic realization of hidden losses in investments and by further expanding resilience in loss reserves, the company has continued to significantly reinforce its financial soundness. This financial discipline creates a stronger foundation for the entire insurance industry, potentially leading to more stable premiums and broader coverage availability for consumers.
The Executive Board and Supervisory Board will propose a 39% higher dividend of EUR 12.50 per share for the 2025 financial year, with a payout ratio of 57% in line with the new dividend strategy aimed at distributing around 55% of IFRS Group net income. This substantial increase in shareholder returns reflects confidence in sustained profitability and has implications for investors seeking stable income in the financial sector. The company's legal information and disclaimers can be found at https://www.hannover-re.com/en/legal-information/.
Looking ahead, Hannover Re fully confirmed its guidance for 2026, expecting group net income of at least EUR 2.7 billion. The company anticipates mid-single-digit percentage growth in property and casualty reinsurance revenue, a combined ratio below 87%, a reinsurance service result of around EUR 925 million in life and health reinsurance, and a return on investment reaching around 3.5%. Chief Executive Officer Clemens Jungsthofel stated that with the company's proven strengths and robust balance sheet, and with additional steps taken to increase resilience, Hannover Re is optimally placed to deliver attractive earnings growth even in challenging markets. This forward-looking confidence suggests continued stability in the reinsurance market, which supports broader economic resilience against unforeseen risks.
