Europe’s four largest reinsurance companies have reported combined earnings of €11 billion for 2024, marking an 8% increase from the previous year, according to a recent Moody’s Ratings report.
The group’s average combined ratio improved to 86.3%, decreasing by one percentage point year-on-year. Global insured losses from natural catastrophes exceeded $100 billion for the fourth consecutive year.
Performance varied significantly among the companies. Munich Re and Hannover Re exceeded expectations with net income increases of 23% and 28% respectively. Swiss Re’s profits remained flat, while SCOR experienced a sharp decline to just €4 million compared to €800 million in 2023, largely due to a €348 million loss from its life and health segment.
The January Los Angeles wildfires have already consumed approximately 39% of the reinsurers' annual catastrophe budget. Insurance claims from these wildfires are estimated between $30 to $50 billion, comparable to losses from a major hurricane.
Despite this challenge, three of the four companies have raised their annual net income targets by 20%. Moody’s maintains a “favorable” outlook for the sector, expecting continued growth in 2025, assuming no additional major catastrophes.
“Most of the reinsurers have increased their ordinary dividends, but have retained healthy surplus capital, leaving a buffer to help absorb potential large catastrophe claims,” the report said.
While reinsurance prices softened slightly at the January 2025 renewals, all four firms maintained discipline in their underwriting. SCOR reported a marginal 0.1% increase in pricing but saw declines for non-proportional coverage—the first since 2017. Swiss Re achieved a 2.8% average price increase, though this fell short of the 4.2% rise in expected losses.
Risk exposure growth has notably slowed across the sector, with Swiss Re reporting just a 2% increase in natural catastrophe premium volumes, down from 12% a year earlier. Industry-wide appetite for US casualty risk has also diminished amid concerns over litigation-driven claims inflation.
All four reinsurers maintained strong solvency positions, with Munich Re’s Solvency II ratio climbing to 287%, positioning these reinsurance giants to weather further challenges while maintaining their growth trajectory.
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