Hannover Re's P&C combined ratio hit 83.2%, beating its 87% target, as large loss costs fell 20% to €785M. Group net income reached €1.4B in H1 2026, with full-year guidance of at least €2.7B reaffirmed.
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Hannover Re posted a 7% rise in Group net income to €1.4 billion in the first half of 2026, beating the prior year's €1.3 billion as operating profit climbed nearly 10% to €1.9 billion. The property and casualty combined ratio strengthened to 83.2% from 88.4%, well inside the full-year target of less than 87%.
Reinsurance revenue fell 3.1% to €12.9 billion, though the drop narrowed to 0.7% at constant exchange rates. The underwriting picture was stronger than the top line suggests. The Group reinsurance service result hit €1.7 billion, up from €1.4 billion a year earlier. Shareholders' equity rose to €13.3 billion at June 30 from €12.9 billion at year-end 2025, while annualized return on equity eased to 21.5% from 23%.
P&C: Lower catastrophe costs, stronger margins
P&C gross reinsurance revenue slipped 8% to €8.8 billion, or 3.9% at constant currencies. Large loss costs for the half totaled €784.7 million, down from €976.1 million last year and below the €1.024 billion budget. The largest natural catastrophe hits were Winter Storm Fern in the U.S. and Canada at €130.4 million, Atlantic windstorms hitting Iberia and Morocco at €126.4 million, and a June earthquake in Venezuela for which Hannover Re set aside €75 million.
The company also booked roughly €200 million for potential impacts tied to the war in Iran, with additional provisions for other risks and a further strengthening of loss reserves.
The P&C net reinsurance service result rose to €1.3 billion from €975.1 million. Operating profit increased 17.7% to €1.5 billion, and the combined ratio improvement to 83.2% from 88.4% beat the full-year target of under 87% by nearly four points.
L&H: Revenue up, operating profit dips
Life and health reinsurance performed as expected. Gross revenue rose 9.1% to €4.1 billion, or 12.1% at constant exchange rates. Net new CSM generation increased to €384.8 million from €364.7 million, and the net CSM grew 6.1% to €6.7 billion. The segment's net reinsurance service result totaled €478 million, up 7.5% from €444.5 million. Operating profit in L&H fell 13.1% to €408.2 million, compared with €469.9 million a year earlier.
Renewals: Volume up, prices down
At the June and July renewals, Hannover Re grew its book 12.3% to €4.24 billion. Prices on renewed business retreated 4.5% on an inflation- and risk-adjusted basis. Year-to-date, renewals grew 7.2% with an overall risk-adjusted price decline of 3.9%. The company said rates remain adequate despite the drop.
The net contractual service margin, which captures future profit embedded in the book, rose 11.4% to €8.8 billion from €7.9 billion at year-end 2025. Net new business CSM in P&C fell 13.3% to €1.7 billion, driven by price declines at renewals and currency effects, partly offset by volume growth from new business.
Investment income lifts the bottom line
The investment result rose to €1.3 billion from €1 billion, with annualized return on investment reaching 3.7%, above the full-year target of roughly 3.5%. CFO Christian Hermelingmeier said the strengthened interest rate level in the asset portfolio through realization of unrealized losses in 2025 played a major role in profitability.
CEO Clemens Jungsthöfel called the first half "a successful six months" and said the company selectively acquired market share alongside clients. He added that the half-year result, combined with resilience strengthened in 2025 and a lean operating model, gave him confidence for the full year.
Outlook
Hannover Re reiterated full-year 2026 guidance of at least €2.7 billion in Group net income, a P&C combined ratio below 87%, an L&H net reinsurance service result of roughly €925 million, and a return on investment around 3.5%. The guidance assumes large losses do not significantly exceed the expected €2.3 billion and no unforeseen capital market disruptions.
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