Hannover Re seeing growth in most segments, nat cat risk appetite expanding: Sven Althoff

Hannover Re, one of Europe’s big four reinsurance companies, has achieved year-to-date growth in traditional treaty renewals of 5.4%, with one of the key drivers being underlying expansion of the firm’s ceding companies, while the carrier’s appetite for natural catastrophe risk is also growing, according to Sven Althoff, Member of the Executive Board for Property & Casualty at Hannover Re.

Within its second quarter and first half of 2025 results, the German reinsurer revealed that during the mid-year renewals, the volume of business changed by -2.9%, although this was driven by the reduction of a large contract, as absent this impact, the company would have booked growth of 4.5%.

Still, combined with a strong performance at the January and April 2025 reinsurance renewals, Hannover Re’s year-to-date growth is solid at 5.4%, supported by around 10% growth in structured solutions.

Speaking recently during the firm’s earnings call, executives were questioned on the 5.4% growth.

“The growth is really coming from almost all of our segments, so it’s very diversified,” said Althoff. “The main driver continues to be the underlying growth of our ceding companies. So, even if we keep our shares the same, we often can show some growth.”

He went on to note that Hannover Re keeps growing its nat cat risk appetite, where the company is underweight in many parts of the world. Althoff said that despite some rate softening, the reinsurer still views the nat cat rate environment as attractive.

“But other than that, with maybe the exception of APAC, where the premium volume is more stable, we are really showing growth in all the segments, and the most pronounced, as we said, is on the structured side. So, very pleasing situation from that point of view, that it’s not only coming out of one basket, but that it’s a true reflection on our global diversified portfolio,” said Althoff.

When pushed on what regions the nat cat risk appetite is focused on, Althoff highlighted both the US and the rest of the world.

“So, it’s not one region in particular, but the US is a growth area for us as well, as we still feel that the rating environment that is offered for US cat business is attractive despite the first reductions,” he said.

During the earnings call, Althoff and Clemens Jungsthöfel, Chief Executive Officer of Hannover Re, also provided some more details on the mid-year renewals, as well as an outlook on the retrocession market and the P&C pricing environment.

“So, the mid-year renewals, I would say, lined up well with the trends reported in January and in April. The market environment is characterised by an increase in reinsurance capital and a willingness to deploy this capital in an attractive market environment,” said Jungsthöfel. “The resulting increase in competition has created some pressure on pricing, most pronounced in property cat renewals. In other lines of business, are more stable.”

“Overall, the rate adequacy remains attractive, and we continue to expand our portfolio on a diversified basis…The underwriting year 2025 marks the third consecutive one in a very active market environment,” he added.

In terms of P&C pricing, Althoff emphasised that the situation throughout 2025 has not really changed, “in the sense that outside property cat, the business is plateauing at a very high level.”

“So, very few reductions on the pricing side, terms and conditions are stable, retentions are stable. And that was also true for the mid-year renewals, where we continued to see a softening in terms and conditions. When it comes to prices in property cat, and of course, the mid-year renewals are particularly heavy in peak territories like the US and Australia. And here on the excess of loss side, we did see high single-digit or lower double-digit reductions throughout most of the renewals.

“The exception, of course, for the US, were those programs that had an impact from the California wildfire. They, of course, did see some increases, and that mix of the portfolio has resulted in the -2.9%. But the fundamental situation is still the same, that for the most part of the business, we are talking about rather stable renewals at a high level, with pressure on pricing, but not retention, not terms and conditions on the property cat side,” explained Althoff.

Hannover Re is both a seller and buyer of reinsurance, and during the Q&A, one analyst asked about the retrocession market and how Hannover Re views the space heading into 2026.

Althoff explained that the firm is currently in the planning phase for next year.

“Our base assumption is that when it comes to our property and specialty protections, we will buy more or less exactly what we have purchased in ’25. So, no intention to buy significantly more or less.

“Of course, we will observe the market, and if we should find later in the year that the pricing offered by the retro market is particularly attractive, we may buy a little more. But of course, also the retro pricing is fully dependent on how the rest of the year is going to perform from a major loss point of view. So, therefore, base assumption is we are going to place what we have placed in 2025 again,” he said.

The post Hannover Re seeing growth in most segments, nat cat risk appetite expanding: Sven Althoff appeared first on ReinsuranceNe.ws.