Hannover Re has reported limited exposure to the Iran conflict so far, though the reinsurance giant acknowledged the situation remains fluid as hostilities in the Persian Gulf continue.
Sven Althoff (pictured above), head of property and casualty at Hannover Re, said during an earnings call that commercial shipping and aviation in the Middle East will be affected by the Iran conflict. He added that it remains unclear what the market will offer in terms of war coverage going forward.
Althoff drew a clear distinction between traditional P&C lines, which largely exclude war perils, and the specialty reinsurance portfolio, where explicit war coverage is written. Exposed lines include marine and aviation hull and cargo, political violence, war on land, trade credit and political risk, he said.
Hannover Re's marine and offshore energy book carries premium volume exceeding $300 million. The company describes itself as a recognized leader in obligatory marine and energy reinsurance. Althoff said the reinsurer is "observing very closely," but has nothing major to report in terms of actual losses to date.
As the Iran conflict is a first-quarter 2026 event, Althoff said the company expects to provide more detail when it next reports in May.
Althoff said the group added to its Russia-Ukraine loss reserves throughout 2025, not solely in the fourth quarter. A low triple-digit amount was added in Q4 specifically for aviation, as more ceding companies reported claims tied to a UK High Court ruling.
That ruling, handed down in June 2025, found that aircraft lessors' losses were covered under hull war risk policies. The judgment, delivered by Mr. Justice Butcher, covered 147 aircraft and 16 engines with a combined insured value of $4.5 billion, as detailed in a WTW analysis from July 2025.
AerCap, the world's largest aircraft leasing company, was the lead claimant, with HSF Kramer noting it was entitled to $1.035 billion from war risk insurers.
Hannover Re had initially set aside roughly €143 million in the first quarter of 2022 for Russia-Ukraine war claims but explicitly excluded aviation at that stage, S&P Global Market Intelligence reported at the time. The company then substantially increased the provision during 2024.
WTW warned in its July 2025 analysis that reinsurers could respond by raising pricing and imposing coverage restrictions, given that reinsurance for many sectors funnels into a small group of major companies suffering claims across multiple lines.
Hannover Re chief executive Clemens Jungsthöfel said the group sees favorable growth conditions ahead, though strong new business generation was offset by negative currency effects.
The company is leaving its 2026 guidance unchanged, including projected group net income of at least €2.7 billion, a combined ratio below 87% and mid-single-digit P&C revenue growth.
The unchanged guidance comes on the back of a record year. Hannover Re reported a 13.4% increase in group net income to €2.6 billion for 2025 and shareholders' equity of €12.9 billion, which the company described as the strongest balance sheet in its history.
The reinsurer will propose a dividend of €12.50 per share, a 39% jump from the prior year's €9.00.
On US casualty uncertainty, Althoff attributed part of the issue to a backlog of court cases that could not be heard during COVID-19 lockdowns.
