Hannover Re cedes EUR 128m of nat cat losses to retrocession in H1

While global reinsurance firm Hannover Re’s large losses came in under budget for the first-half of 2023, the company still reported that it ceded just over EUR 128 million of the natural catastrophe loss burden to its retrocession program and capital partners.

Large losses to Hannover Re’s property and casualty reinsurance business came out at EUR 735.1 million gross, for the first-half, below the EUR 751 million budget it had set.

But Hannover Re reports the net loss burden at just EUR 606.9 million, suggesting roughly EUR 128.2 million was ceded to retrocession partners.

Of the large losses, EUR 590.6 million were from natural catastrophe events that occurred during the first-half of this year.

The largest of those was the earthquakes in Turkey, costing EUR 262.8 million gross, with a small amount ceded and EUR 257 million of the loss net retained.

Meanwhile, the floods in New Zealand cost Hannover Re EUR 89.3 million, but much more of this was supported by retrocession, with the net retained loss just EUR 45.3 million.

Cyclone Gabrielle, which also struck New Zealand, saw a similarly large percentage ceded to retrocession, with the gross loss EUR 121.3 million, but the net retained loss only EUR 65.4 million.

A March hail storm in the United States struck Hannover Re with a gross large loss of EUR 20.9 million, but only EUR 6.2 million was retained, thus it was the largest percentage recovery from retro, it appears.

Two tornado losses from March and April also saw smaller retro recoveries made, but interestingly Hannover Re has not reported any large loss for the June severe convective storm activity in the United States with its half-year results.

That’s surprising given the scale of the loss activity experienced in June in the US, but also possible the individual events weren’t big enough, or that it is too early for Hannover Re to have a clear picture of any exposure to those events.

Conversely, no retrocession support was seen for the May rain and flooding in Italy, with Hannover Re reporting gross and net losses of EUR41.5 million for that event.

Five property loss events and two credit losses also did not see any recoveries, it appears.

Hannover Re continues to experience benefits from its retrocession arrangements, of which a large proportion are sourced from capital markets investors.

Also read:

– Hannover Re posts improved P&C reinsurance underwriting result as losses fall within budget.

– Significant retro buy limits nat cat appetite but there’s room to grow: Hannover Re’s Althoff.