Hannover Re achieved its increased earnings guidance in the 2025 financial year despite challenging market conditions, with group net income rising sharply by 13.4% to EUR 2.6 billion. The company simultaneously strengthened its resilience and sustained profitability, positioning itself for future growth. The Executive Board and Supervisory Board will propose a 39% higher dividend of EUR 12.50 per share for the 2025 financial year, with the payout ratio of 57% aligning with the new dividend strategy aimed at distributing around 55% of IFRS Group net income.
Reinsurance revenue for the Group rose by 1.5% to EUR 26.8 billion, with growth reaching 4.7% at constant exchange rates. The reinsurance service result increased substantially by 15.8% to EUR 3.5 billion, while the operating profit rose by 5.7% to EUR 3.5 billion. Earnings per share reached EUR 21.90. Shareholders' equity amounted to EUR 12.9 billion as of December 31, 2025, with return on equity coming to 21.4%, clearly surpassing the strategic target of more than 14%.
In property and casualty reinsurance, reinsurance revenue rose slightly by 0.6% to EUR 18.8 billion, with growth of 3.8% at constant exchange rates. Net expenditures for large losses totalled EUR 1,725 million, coming in below the full-year budgeted expectation of EUR 2.1 billion. The largest expenditures for individual losses included the California wildfires at EUR 595 million, Hurricane Melissa at EUR 329 million, the earthquake in Myanmar at EUR 118 million, and severe hailstorms in Australia at EUR 102 million. The reinsurance service result increased considerably to EUR 2.6 billion, with the combined ratio improving to 84.0%.
Life and health reinsurance saw reinsurance revenue increase to EUR 8.0 billion, with growth of 6.8% at unchanged exchange rates. The reinsurance service result climbed to EUR 903.0 million, surpassing the target of more than EUR 875 million. The portfolio of assets under own management was slightly higher at EUR 66.3 billion, with investment income amounting to EUR 1.7 billion and return on investment reaching 2.5%. This return fell short of the guided target primarily due to the strategically motivated active realisation of hidden losses in the fixed-income portfolio to boost future earnings.
Hannover Re expects Group net income of at least EUR 2.7 billion for the 2026 financial year, with property and casualty reinsurance anticipated to deliver growth in reinsurance revenue in the mid-single-digit percentage range in traditional business and a combined ratio below 87%. Life and health reinsurance is expected to achieve a reinsurance service result of around EUR 925 million, while the return on investment is projected to reach around 3.5%. Achievement of this guidance assumes large loss expenditure does not significantly exceed the budgeted level of EUR 2.3 billion and there are no unforeseen distortions on capital markets.
The company's financial strength is further evidenced by its capital adequacy ratio under Solvency II, which stood at 256% at year-end, comfortably above the threshold of more than 200%. This ratio already takes into account the proposed dividend for 2025 as well as planned business growth in 2026. Further information about the company's results and reports can be accessed at https://www.hannover-re.com/en/investors/results-and-reports/#2025. Legal information is available at https://www.hannover-re.com/en/legal-information/.
