Investing.com -- Shares of Hannover Re (ETR:HNRGn) rose over 2% on Monday (NASDAQ:MNDY) after the company reported a 30% jump in net income for the first three quarters of 2024, with a revised full-year profit target now raised to €2.3 billion.
For the first nine months of the year, Hannover Re reported Group net income of €1.8 billion, reflecting a 30.4% increase compared to the same period in 2023.
This strong result was boosted by a 6.4% increase in reinsurance revenue, which reached €19.7 billion, with a 7.0% growth adjusted for exchange rate effects.
The reinsurance service result also saw an impressive rise of 36.4%, reaching €2.1 billion, demonstrating strong underwriting profitability.
Although the company faced a structurally negative reinsurance finance result of €784 million, this did not overshadow the overall positive business trajectory.
The company’s operating profit climbed 33.3% to €2.4 billion, while net income rose to €1.8 billion, up from €1.4 billion in the previous year.
This improvement was further assisted by a one-off tax benefit of €120 million.
As a result, earnings per share reached €15.13, a jump from €11.60 in 2023. The company’s return on equity also saw a healthy uptick, standing at 22.9% as of September 30, 2024, compared to 20.0% a year earlier.
In its statement, Hannover Re said that it expects the positive momentum to continue, adjusting its full-year profit guidance for 2024 to around €2.3 billion, up from the earlier target of at least €2.1 billion.
The company is confident that large loss expenditures will stay within expectations, which were set at €1.825 billion for the year.
Reinsurance revenue is forecast to grow by more than 5%, assuming stable exchange rates, and the company anticipates maintaining a combined ratio of under 89% in property and casualty reinsurance. Life and health reinsurance is also expected to deliver strong results, with a projected reinsurance service result of over €850 million.
Hannover Re said its guidance for 2025, forecasting Group net income of around €2.4 billion.
The company is optimistic about the continued demand for its high-quality reinsurance protection and expects reinsurance revenue in property and casualty to grow by more than 7%.
A combined ratio of under 88% is also anticipated, reflecting the favorable market environment.
Additionally, the company projects a 2% increase in its contractual service margin in life and health reinsurance and expects a reinsurance service result exceeding €875 million in this segment.
Investment returns were another bright spot for Hannover Re, with the investment portfolio reaching €63 billion by the end of September.
The company reported a 14.2% increase in the investment result, which amounted to €1,445 million.
The annualized return on investment was 3.1%, surpassing the targeted return, due to the company’s diversified portfolio, including resilient alternative investments in private equity, real estate, and infrastructure.