Hannover Re, one of Europe’s big four reinsurance companies, expects the renewal rounds for the rest of 2025 to be similar to the experience at January 1st with the market poised to plateau at a high level, according to Sven Althoff, Member of the Executive Board for property and casualty (P&C).
Executives at Hannover Re recently discussed the firm’s 2024 performance and took questions on market trends and conditions after announcing a very strong set of results for the year, which included 28% net income growth to €2.3 billion.
During the call, the company was questioned on the outlook for the April and mid-year reinsurance renewals, following some overall softening at 1.1 2025 and a particularly costly start to the year with the Los Angeles, California wildfires.
“When it comes to the renewals for the rest of the year, we expect them to look rather similar to what we have seen at the 1st of January renewal,” said Althoff. “So, this would mean that the market is plateauing at a high level, with terms and conditions and retention levels more or less unchanged.”
At the January 1st, 2025, renewals, loss hit cat business saw further rate increases from reinsurers, but within the property cat space in particular, business with no recent loss experience saw some reductions. Of course, it varied by region and peril, but overall, the market softened when compared with the 1.1 2024 renewals.
“So, we do don’t expect that to fundamentally change at the 1.4, 1.6, 1.7 renewals. The wildfires may slow down the level of rate reductions that can be achieved for business that is not directly impacted by the wildfires. And of course, we would expect strong increases on any California wildfire related business,” said Althoff.
The April 1st renewal round is heavily focused on Japan, and commenting specifically on the region, Althoff confirmed that the reinsurer expects relatively stable demand and a healthy level of supply.
“We expect similar development like we have seen at 1.1, with hopefully pressure on pricing being a little less compared to 1.1, as we had a very significant loss in the industry so early in the year, but there will still be pressure,” he said.
Hannover Re announced last month a loss estimate range of between €500 million and €700 million for the California wildfires, based on an industry loss of between $30 billion and $40 billion. Even at the lower end of the company’s loss range, this is above its Q1 large loss budget but isn’t sufficient to warrant an uplift in its net income guidance of €2.4 billion for 2025.
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