Hannover Re achieved its increased earnings guidance for the 2025 financial year, with group net income rising sharply by 13.4% to EUR 2.6 billion. The company's Executive Board and Supervisory Board will propose a 39% higher dividend of EUR 12.50 per share for the 2025 financial year, representing a payout ratio of 57% that aligns with the company's new dividend strategy aimed at distributing around 55% of IFRS Group net income. Chief Executive Officer Clemens Jungsthöfel stated that Hannover Re stands for reliability and financial strength, having achieved increased earnings guidance while taking strategic actions to reinforce future profitability. The substantial dividend increase allows shareholders to participate more than ever in the company's success.
Reinsurance revenue for the Group rose by 1.5% to EUR 26.8 billion, with growth reaching 4.7% at constant exchange rates. The reinsurance service result increased by 15.8% to EUR 3.5 billion, while the operating profit rose by 5.7% to EUR 3.5 billion. Earnings per share reached EUR 21.90. Hannover Re was able to deliver increased net income while significantly boosting its earnings power for future years by expanding the resilience of its loss reserves and actively realizing hidden losses in its investment portfolio. The return on equity came to 21.4%, clearly surpassing the strategic target of more than 14%. Chief Financial Officer Christian Hermelingmeier noted 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 now has the strongest balance sheet in its history, with a capital adequacy ratio under Solvency II standing at 256% at year-end, comfortably above the threshold of more than 200%. Further information is available at https://www.hannover-re.com/en/investors/results-and-reports/#2025.
In property and casualty reinsurance, reinsurance revenue rose slightly by 0.6% to EUR 18.8 billion, with growth reaching 3.8% at constant exchange rates. Net expenditures for large losses totaled 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. The combined ratio improved to 84.0%. In life and health reinsurance, the reinsurance service result climbed to EUR 903.0 million, surpassing the target of more than EUR 875 million. Reinsurance revenue increased to EUR 8.0 billion, with growth of 6.8% at unchanged exchange rates. The return on investment reached 2.5%, falling short of the guided target return primarily due to strategically motivated active realization of hidden losses in the fixed-income portfolio to boost future earnings.
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 reinsurance revenue for property and casualty reinsurance, a combined ratio below 87%, a reinsurance service result of around EUR 925 million in life and health reinsurance, and a return on investment projected to reach around 3.5%. Achievement of this guidance assumes large loss expenditure does not significantly exceed the budgeted level of EUR 2.3 billion and there are no unforeseen distortions on capital markets. The company's disclaimer can be viewed at https://www.hannover-re.com/en/legal-information/.
