Sven Althoff, Member of the Government Board for Property & Casualty (P&C) of enormous European reinsurer Hannover Re stated this morning that disaster bonds have been the principle space of enlargement for the corporate inside the insurance-linked securities (ILS) area, noting that it’s a “properly rising half” of the agency’s enterprise.
Earlier this morning, Hannover Re published its full-year 2024 results, revealing a 28% enhance in group web earnings, return on fairness of 21.2% for the 12 months, robust progress as reinsurance income rose by 7.6% throughout the enterprise to EUR 26.4 billion.
On the identical time, reinsurance income inside P&C virtually grew by 11% to EUR 18.7 billion, which in line with Hannover Re, was pushed by structured reinsurance and ILS.
Addressing journalists earlier this morning, Althoff supplied some color on the ILS progress seen inside Hannover Re’s P&C reinsurance enterprise.
“ILS was definitely a wholesome a part of the expansion story relating to that a part of our P&C enterprise.
“The primary space of progress inside the ILS area for us has been on the cat bond aspect, the place we’re serving to and reworking fairly various the cat bonds into the capital market, along with the unique sponsors,” Althoff stated.
“That may be a properly rising a part of our enterprise. The extra conventional ILS collateralized fronting area was extra secure, however the cat bond aspect was clearly rising for us,” he added.
Hannover Re acted as a facilitator for round US $4 billion of disaster bond transactions, over 13 offers, which was up on its 2023 exercise and units a brand new file for the corporate.
On the January renewals, Hannover Re renewed its retrocession preparations for 2025, rising its pure disaster retrocessional protections by EUR 100 million to a bit greater than EUR 1.2 billion, with growth in the aggregate excess of loss and whole account excess of loss covers more than offsetting a reduced K-Cessions sidecar for the year.
Addressing retro market situations for 2025, Althoff stated: “From a retro perspective, we noticed a fairly comparable state of affairs in comparison with what we skilled on the incoming enterprise. So, there was definitely extra provide of capability out there in comparison with 12 months in the past.
“From that perspective, we determined to make use of that chance to purchase a bit extra restrict, each on the occasion and on the combination aspect. But additionally, that market continues to be disciplined, so our retention ranges stayed on the identical degree in comparison with the earlier 12 months.”
“And from that perspective, I’d say that the retro market and the property cat market are very a lot in sync proper now relating to normal situations and provide and demand,” he concluded.
