International reinsurer Hannover Re elevated its pure disaster retrocession protections on the January 1st, 2025, reinsurance renewals by EUR 100 million to a bit greater than EUR 1.2 billion, with development within the combination extra of loss and entire account extra of loss covers greater than offsetting a decreased Ok-Cessions sidecar for the yr.
This morning, Hannover Re offered an replace on the end result of its 1.1 2025 reinsurance renewals, throughout which the agency achieved premium development of seven.6% in conventional property and casualty reinsurance, with a mean inflation and risk-adjusted value decline of two.1%.
On the renewals, the reinsurer elevated its pure disaster retrocession in step with plan, with no change to the general construction of the tower, though did cut back proportional cessions to 33% and enhance its non-proportional safety.
Hannover Re says that there was ample nat cat capability accessible within the retro market at 1.1 2025, with risk-adjusted pricing barely down compared with the 1.1 2024 renewals.
General, the German reinsurer’s retro safety has risen by 9% to over EUR 1.2 billion for 2025 from EUR 1.1 billion in 2024, though the programme remains to be roughly 10% smaller than it was for 2023 when it elevated to EUR 1.34 billion.
As in 2024, the corporate’s retro tower is comprised of three layers – the Ok-Cession sidecar, a complete account extra of loss layer, and an combination extra of loss layer on the prime of the programme.
Beginning with the underside layer of the three, the Ok-Cessions quota share sidecar, Hannover Re has opted to cut back the scale for 2025 by round 3% to $735 million, in contrast with $757 million in 2024. In actual fact, the scale of the sidecar for 2025 is 12% decrease than in 2023 when Hannover Re elevated it to $831 million from $450 million in 2022.
Artemis reported recently that Hannover Re had been assessing its risk management need in relation to the K-Cessions quota share sidecar for the second yr working, with the agency explaining that there’s more upside to retaining more risk while market conditions remain attractive.
Hannover Re’s retrocessional reinsurance preparations for 2025 might be seen within the diagram beneath:
As evidenced above, whereas the Ok-Cessions sidecar shriveled on the Jan 1 2025 renewals, the opposite two layers grew in measurement.
The entire account extra of loss layer sits above the Ok quota share sidecar and for 2025 has elevated in measurement by greater than 12% to EUR 434 million, in contrast with EUR 387 million in each 2024 and 2023, and EUR 276 million in 2022.
The smallest layer of retro protection for Hannover Re is the mixture extra of loss layer, which for 2025 the corporate has determined to extend in measurement by 41% to EUR 100 million in contrast with EUR 71 million in 2024 and 2023, and EUR 113 million in 2022.
Hannover Re’s elevated retro safety for the yr comes as the massive European service additional grew its general portfolio on the 1.1 2025 renewals, with the agency’s Chief Govt Officer, Jean-Jacques Henchoz, noting that demand for “high-quality reinsurance capacities was as soon as once more larger than within the earlier yr.”
“Because of our very wholesome capitalisation, we have been capable of supply our purchasers extra reinsurance safety at acceptable circumstances,” mentioned the CEO.
