Hannover Re Earnings: Tracking Our Thesis in Property and Casualty; Lagging in Life and Health

In first-quarter 2024, we think Hannover Re continued to demonstrate its growth strategy. In property and casualty it grew reinsurance revenue on a foreign-exchange-adjusted basis by 5%. That growth is mainly attributable to structured reinsurance and insurance-linked securities, as well as Europe and US sales. In recent years, Hannover Re has grown structured reinsurance by about 30% a year. Its reinsurance revenue of EUR 4.743 billion is below the EUR 4.884 billion company-compiled consensus estimate and around our 2024 EUR 18.51 billion estimate. We think Hannover Re is still less oriented to natural catastrophe sales, utilizing EUR 52 million of its EUR 378 million property and casualty budget for a large loss. Uncertainty remains over the initial estimate for the Scott Key Bridge in Baltimore, but that loss should be well covered. The firm's full-year target for its combined ratio is below 89%. In the first quarter the combined ratio is 88%, about the 88.3% consensus estimate. Our full-year estimate is 88.97% including a 7.5% discounting effect. The first quarter carries a 7% discounting effect.