According to preliminary figures, the third-largest reinsurer in the world had already reported a net consolidated profit of 1.41 billion euros at the beginning of February.
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Munich Hannover Re is paying out a total of six euros per share to its shareholders for the past year. The total dividend consists of a base dividend of five euros and a special dividend of one euro.
The total of six euros exceeds the distribution from the previous year, when a total of 5.75 euros per share was paid out to shareholders, by 4.3 percent. “The environment in which we operate remains challenging,” said CEO Jean-Jacques Henchoz. However, Hannover Re once again demonstrated its resilience in the 2022 financial year.
With the distribution of six euros per share, the Dax group is continuing its usual path of a two-part distribution in recent years. The basic dividend should be at least as high as the previous year’s payment. For the past year, however, it has increased by more than eleven percent from EUR 4.50 to EUR 5.
The special dividend is to be paid depending on the capital base if this exceeds the capital requirements for future growth and the profit targets have been met. That was the case last year, but high claims payments also had a negative impact. The special dividend is therefore only one euro this time, compared to 1.25 euros in the previous year.
According to preliminary figures, the third-largest reinsurer in the world after Munich Re and Swiss Re had already reported a net profit of 1.41 billion euros at the beginning of February. He confirmed this number on Thursday. The targeted profit margin at the lower end of between 1.4 and 1.5 billion euros was achieved despite the claims burden.
Elsewhere, too, the numbers that have now been confirmed are the same as the preliminary results. According to this, thanks to high demand for insurance cover, gross premium income rose by almost 20 percent to 33.3 billion euros last year.
The return on investment reached 3.2 percent in the course of the interest rate turnaround and was thus well above the self-imposed target of 2.5 percent. This was mainly due to a high proportion of inflation-linked bonds in the portfolio, which generated a return of 458 million euros. The return on equity was 14.1 percent after 10.8 percent in the previous year and thus slightly higher than that of Munich Re, which achieved 13.5 percent.
High exposure to major claims
Hannover Re paid out a total of around EUR 1.7 billion to customers for major claims, which is EUR 300 million more than planned. Hurricane Ian, which swept across the southeastern United States at the end of September, stands out among the highest individual losses. However, the net burden of the Hannoveraner of 322 million euros was significantly lower than that of Munich Re and Swiss Re due to lower commitments there. Both competitors reported damage of well over a billion euros there.
Hannover Re also recorded high individual losses from floods in Australia (EUR 233m) and winter storm Ylenia (EUR 107m). In addition, there were losses from the drought in Brazil (EUR 106 million) and floods in Malaysia (EUR 54 million) from 2021.
The corona pandemic caused costs of 269 million euros in non-life reinsurance and 276 million euros in life and health reinsurance. Hannover Re has set aside a provision of 331 million euros for possible late damage from the war in Ukraine. For the earthquake in Turkey and Syria a few weeks ago, the group expects a loss burden of 200 million euros.
In terms of dividend yield, Hannover Re still lags behind its two most important competitors, despite the higher payout. In relation to the current share price of 182.40 euros, the Hanover-based company achieves a return of 3.3 percent, Munich Re is currently bringing it to 3.5 percent. However, Swiss Re is far ahead, having announced an increase in the distribution by 50 centimes to 6.40 francs per share, thus offering a current dividend yield of 6.5 percent.
The Swiss are known for their high payouts. Last year they had a surplus of $472 million after a lossy start due to a strong final quarter. In the current year it should even be more than three billion dollars. Munich Re is aiming for a profit of four billion euros this year, after 3.4 billion euros last year.
At Hannover Re, the management expects a net consolidated profit of 1.7 billion euros this year. Insurers will then have to publish their figures for the first time under the new IFRS 17 accounting standard. Hannover Re then expects revenue growth of at least five percent and a return on investment of at least 2.4 percent.
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