HANNOVER/BERLIN (dpa-AFX) - Hannover Re expects profits to continue rising in the coming years thanks to high prices for reinsurance cover. In 2024, net income should reach at least 2.1 billion euros - almost a quarter more than the minimum target set by CEO Jean-Jacques Henchoz for 2023. The world's third-largest reinsurer announced at its Investor Day in Berlin on Tuesday that it will continue to grow in the years up to 2026. The news was extremely well received on the stock market: The price of the Hannover Re share rose to a record high.

At times in the morning, the Hannover Re share rose to EUR 224.60 and thus traded at a higher price than ever before in its almost 30-year history on the stock exchange. At midday it was still the leader of the DAX with a gain of 1.3 percent to 223.20 euros. In the year to date, the share price has risen by a good fifth.

The Executive Board's profit target for 2024 is only slightly above the average expectations of analysts, who had predicted just under 2.1 billion on average. However, Hannover Re's top management usually sets itself rather modest targets, which are usually below analysts' expectations. Industry experts from analysts Jefferies and the US bank JPMorgan were correspondingly positive about Tuesday's news.

For some time now, reinsurers such as Munich Re, Swiss Re and Hannover Re have been able to achieve significantly higher premiums for assuming risks from primary insurers such as Allianz and Axa. They also have to cover higher losses, which have recently become increasingly expensive due to inflation and natural disasters. However, together with the rise in interest rates, the higher premiums are also driving up their profits.

Hannover Re has already set itself the target of increasing profits by more than a fifth by 2023. If it actually earns EUR 2.1 billion next year, that will be 50 percent more than the EUR 1.4 billion of 2022. Like other large insurers and reinsurers, the Group has been calculating its business figures in accordance with the new IFRS 17 and IFRS 9 rules since 2023, meaning that the figures cannot be compared exactly with the profits of previous years.

Meanwhile, Chief Financial Officer Clemens Jungsthofel expressed his confidence at the Investors' Day in Berlin that Hannover Re will again be able to obtain lucrative conditions from primary insurers in 2024. The Executive Board had already made it clear at the industry meetings in Monte Carlo and Baden-Baden in September and October that it wanted to continue to tighten the price screw with its customers.

The Group's reinsurance turnover is now set to increase by more than five percent in the coming year - and even more in the property and casualty business. The Executive Board is planning 1.825 billion euros for major claims - 100 million more than in the current year.

Nevertheless, after deducting expenses for claims, administration and sales, a large part of the turnover should remain in the property and casualty business: The Executive Board expects a combined ratio of less than 89 percent. In the first nine months of the current year, it was 91.9 percent. The Executive Board also expects interest income to increase by at least 800 million euros.

As usual, the Management Board was more cautious in its medium-term plans. Operating profit (EBIT) is expected to increase by an annual average of more than five percent in the period from 2024 to 2026. The return on equity is expected to average more than 14 percent.

Hannover Re has significantly exceeded its return target in recent years: While the management had set itself a return on equity target of at least 9.7 percent for the period from 2021 to 2023, by the end of September 2023 it had averaged 15 percent.

Meanwhile, the Group's shareholders can continue to expect high dividends: the basic dividend is set to increase annually from 2024 to 2026. In addition, the Executive Board continues to consider special dividends if the Group's capital exceeds the requirements for future business growth.

In the past ten years, Hannover Re has paid no special dividend only twice. The lion's share of the dividends is paid to the insurance group Talanx (HDI), which holds a good half of Hannover Re's shares./stw/lewmis