Hannover Re, number three in the global market, promises its investors a further jump in profits and increasing earnings over the next two years. CEO Jean-Jacques Henchoz stated before an investor day on Tuesday that net profit will increase to at least 2.1 billion euros by 2024, which corresponds to a quarter increase compared to this year. This forecast is significantly higher than the previously expected 1.7 billion euros.
Henchoz emphasized that the strong position of Hannover Re in the reinsurance market and successful cycle management are crucial for the expected jump in profits in 2024. The prerequisite for this is that large losses do not significantly exceed the budget of 1.825 billion euros. Above-average growth in the property and casualty segment, an improved loss ratio of 89%, and a return of at least 2.8% for capital investments also contribute to the positive outlook.
Reasons for the expected jump in profits were mainly due to the "hard market" in which primary insurers and brokers are increasingly demanding reinsurance coverage and are willing to pay higher prices for it. The prices and conditions also continued to improve in recent renewals of the property and casualty reinsurance, as Hannover Re recently announced. The company expects this trend to continue in the coming years.
Shareholders, especially insurance company Talanx, as the majority shareholder, are expected to benefit from the anticipated surge in profits. The base dividend is set to increase year after year, and if the company reserves allow for it, a special dividend will also be distributed. In 2022, the base dividend was six euros per share, with one euro as a special dividend. Over the past ten years, a special distribution has only been skipped twice.
Henchoz promises investors continuous growth for the next few years: The average return on equity should exceed 14 percent by 2026, which is significantly higher than the previous target of 9.7 percent. The operating profit (EBIT) is expected to increase by more than five percent annually. With these prospects, investors are likely to remain loyal to Hannover Re in the future.
