Hannover Re beats FY2023 earnings target and raises dividend

25 March 2024 — Andrei VICTOR
German reinsurer Hannover Re generated Group net income of EUR 1.8 billion for the 2023 financial year (previous year: EUR 0.8 billion) and thus beat its guidance of at least EUR 1.7 billion.

“In view of the good business development, a further increase in the dividend is also envisaged. The Executive Board and Supervisory Board will propose to the Annual General Meeting a dividend distribution of altogether EUR 7.20 (EUR 6.00) per share. This is comprised of an ordinary dividend of EUR 6.00 (EUR 5.00) per share and a special dividend of EUR 1.20 (EUR 1.00) per share”, as the reinsurer informed in a statement published here.

"We achieved a great deal in 2023: Our two business groups and our investments performed very well. We were able to beat our earnings target and significantly increase the dividend. At the same time, we further strengthened Hannover Re's resilience," said Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re. "Despite the continued challenging environment, we have further improved the profitability of our business and cemented our role as a reliable partner and robustly capitalised reinsurer."

Since 1 January 2023 Hannover Re has reported its results on the basis of the new accounting standards IFRS 17 and IFRS 9.

The reinsurance revenue (gross) increased slightly by 1.8% to EUR 24.5 billion (EUR 24.0 billion). Growth of 4.9% would have been booked at unchanged exchange rates, almost reaching the set target of at least 5%.

The reinsurance service result (net), which reflects the profitability of underwriting activity less business ceded (primarily retrocessions and insurance-linked securities), rose sharply by 24.1% to EUR 1.7 billion (EUR 1.3 billion). The reinsurance finance result (net) adjusted for exchange rate effects, which is structurally negative and includes the interest accretion on technical reserves discounted in prior years, fell to EUR -880 million (EUR -583 million).

The operating result (EBIT) amounted to EUR 2.0 billion (EUR 1.5 billion). Group net income increased to EUR 1.8 billion (EUR 781 million). Earnings per share thus reached EUR 15.13 (EUR 6.47). Exceptionally low tax expenditure of EUR 26 million (EUR 526 million) was incurred in the 2023 financial year, primarily due to a one-time tax effect connected with the implementation of global minimum taxation.

"This special tax effect provided additional room to further increase our resilience," said Clemens Jungsthofel, Chief Financial Officer of Hannover Re. "We used this opportunity to additionally strengthen our loss reserves in property and casualty reinsurance, thereby significantly increasing the confidence level of our reserves."