The results were supported by continued strong performance in property and casualty (P&C) underwriting and investment income, marking the second consecutive year of elevated margins in a favorable reinsurance pricing cycle.
SCOR diverged from peers due to losses linked to adverse changes in life and health (L&H) reserving assumptions. Fitch said that while capital adequacy remained strong across the peer group, heightened macroeconomic and geopolitical uncertainty could present headwinds in 2025.
The four companies recorded a record-low average combined ratio of 86.3% in P&C reinsurance for the year, a 1.0 percentage point improvement from 2023. Fitch attributed this to stable pricing levels and a relatively benign large-loss environment.
All reinsurers except Swiss Re met or exceeded guidance. Swiss Re’s combined ratio rose due to prior-year US liability reserve additions.
In 2024, the major European reinsurers demonstrated resilience and financial strength amid a challenging environment marked by significant natural catastrophes.
Munich Re reported a net result of €5.671 billion, surpassing its original profit target of €5.0 billion. This marks the fourth consecutive year that Munich Re has exceeded its annual profit expectations.
Swiss Re reported a net profit of US$3.24 billion, a 3.1% increase from the previous year. The company faced claims of less than US$700 million from the Los Angeles wildfires in January.
Hannover Re achieved a net income of €2.3 billion, a 28% increase from the previous year, aligning with its revised higher guidance. Gross reinsurance revenue rose by 8% to €26.4 billion, and the reinsurance service result increased by 82% to €3 billion.
In the fourth quarter of 2024, SCOR reported a net profit of €233 million, exceeding analyst expectations. However, the full-year net income was modest at €4 million, reflecting challenges faced earlier in the year due to adverse changes in life and health reserving assumptions.
According to Fitch, reinsurers used their P&C underwriting performance to increase specific and general claims reserves, supporting reserve adequacy assessments. Despite insured natural catastrophe losses totaling approximately US$150 billion globally, most losses remained within primary insurers’ retention levels and below budgeted reinsurance thresholds.
Performance across L&H lines varied. Munich Re, Hannover Re, and Swiss Re reported positive results, driven by consistent contractual service margin release and favorable margins on both new and existing business.
SCOR, however, incurred a loss in the segment due to its reserving assumption review, illustrating the sensitivity of L&H earnings to such changes.
Fitch reported that capital adequacy across all four reinsurers remained strong at year-end 2024. SCOR’s solvency was supported by capital management actions that offset reserving-related impacts. Financial leverage remained low across the group, consistent with previous years.
Market-wide insured property catastrophe losses reached about US$150 billion in 2024, with hurricanes and convective storms each contributing US$50 billion. Other mid-size events, including flooding in Europe and the Middle East, added US$13 billion.
Despite the scale of events, reinsurers’ budgets remained intact for the second consecutive year as primary insurers absorbed 85%-90% of losses due to higher attachment points.
Fitch cautioned that reinsurers may face increased difficulty adhering to catastrophe budgets in 2025. Early-year losses from the Los Angeles wildfires, estimated at US$40 billion, may have already consumed around 35% of European reinsurers’ annual catastrophe budget on average. However, Fitch said these losses have not yet impacted 2025 earnings guidance.
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