Hannover Re achieved its increased earnings guidance in the 2025 financial year despite challenging market conditions, with group net income rising sharply by 13.4% to €2.6 billion. The company simultaneously strengthened its resilience and sustained profitability through strategic actions, including expanding loss reserve resilience and actively realizing hidden losses in its investment portfolio.
The Executive Board and Supervisory Board will propose a 39% higher dividend of €12.50 per share for the 2025 financial year, representing a payout ratio of 57% that aligns with the new dividend strategy aimed at distributing around 55% of IFRS Group net income. Chief Executive Officer Clemens Jungsthöfel stated that shareholders are participating more than ever in Hannover Re's success through this substantial dividend increase.
Reinsurance revenue for the Group rose by 1.5% to €26.8 billion, with growth reaching 4.7% at constant exchange rates. The reinsurance service result increased by 15.8% to €3.5 billion, while the operating profit increased by 5.7% to €3.5 billion. Return on equity came to 21.4%, clearly surpassing the strategic target of more than 14%.
In property and casualty reinsurance, reinsurance revenue rose slightly by 0.6% to €18.8 billion, with growth reaching 3.8% at constant exchange rates. Net expenditures for large losses totaled €1,725 million, coming in below the full-year budgeted expectation of €2.1 billion. The largest expenditures for individual losses included the California wildfires at €595 million, Hurricane Melissa at €329 million, the earthquake in Myanmar at €118 million, and severe hailstorms in Australia at €102 million.
The life and health reinsurance segment saw reinsurance revenue increase to €8.0 billion, with the reinsurance service result climbing to €903.0 million and surpassing the target of more than €875 million. The return on investment reached 2.5%, falling short of the guided target return of around 2.9% primarily due to the strategically motivated active realization of hidden losses in the fixed-income portfolio to boost future earnings.
Hannover Re expects Group net income of at least €2.7 billion for the 2026 financial year, with property and casualty reinsurance projected to deliver growth in reinsurance revenue in the mid-single-digit percentage range in traditional business and a combined ratio below 87%. The company anticipates a reinsurance service result of around €925 million in life and health reinsurance and projects a return on investment reaching around 3.5%.
Chief Financial Officer Christian Hermelingmeier emphasized that through systematic realization of hidden losses in investments and by further expanding resilience in loss reserves, Hannover Re has continued to significantly reinforce its financial soundness. The company's capital adequacy ratio under Solvency II stood at 256% at year-end, comfortably above the threshold of more than 200%.
Further information, including the financial supplement, can be accessed at https://www.hannover-re.com/en/investors/results-and-reports/#2025. Please note the disclaimer available at https://www.hannover-re.com/en/legal-information/.
