Speaking during an analyst call for Hannover Re’s Q2 2025 financial results this week, Sven Althoff, Member of the Executive Board for Property & Casualty (P&C), explained that despite natural catastrophe pricing being under pressure, terms and conditions and importantly attachment points remain stable.we reported that Hannover Re remained over its large loss budget after the first-half of 2025, but the second-quarter was a far less impactful period than Q1 which resulted in the reinsurer only ceding EUR 21 million of natural catastrophe losses with insurance-linked securities (ILS) capital sources.As well as this, operating profit for Hannover Re’s property and casualty reinsurance business increased by 11.6% in the first-half of the year, to EUR 1.3 billion.

During the call, whilst discussing the P&C pricing environment, Althoff explained that the situation throughout 2025 has not really changed, “in the sense that outside property cat, the business is plateauing at a very high level.” “So, very few reductions on the pricing side, terms and conditions are stable, retentions are stable.And that was also true for the mid-year renewals, where we continued to see a softening in terms and conditions,” Althoff said.He continued: “When it comes to prices in property cat, and of course, the mid-year renewals are particularly heavy in peak territories like the US and Australia.

And here on the excess of loss side, we did see high single-digit or lower double-digit reductions throughout most of the renewals.“The exception, of course, for the US, were those programs that had an impact from the California wildfire.They, of course, did see some increases, and that mix of the portfolio has resulted in the -2.9%.

But the fundamental situation is still the same, that for the most part of the business, we are talking about rather stable renewals at a high level, with pressure on pricing, but not retention, not terms and conditions on the property cat side,” Althoff further explained.Moreover, that keeping reinsurance attachment points stable at their current levels where they had been reset to during the recent hard market is seen as the most critical factor in reinsurance profitability, with analysts suggesting that this is equivalent to a 20% to 30% benefit in terms of pricing.Also, during the call, Clemens Jungsthöfel, Chief Executive Officer of Hannover Re provided some comments on the mid-year reinsurance renewals.

“So, the mid-year renewals, I would say, lined up well with the trends reported in January and in April.The market environment is characterised by an increase in reinsurance capital and a willingness to deploy this capital in an attractive market environment,” Jungsthöfel said.Adding: “The resulting increase in competition has created some pressure on pricing, most pronounced in property cat renewals.

In other lines of business, are more stable.“Overall, the rate and accuracy remains attractive, and we continue to expand our portfolio on a diversified basis,” Jungsthöfel said...

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