Fitch: European reinsurers confirm resilience to catastrophes

European reinsurers' 2017 results support Fitch Ratings' view of the sector's resilience to catastrophe losses, the agency said in its recent "European Reinsurers Resilient to Catastrophe Losses" report.

With capital typically above companies' target levels, Fitch doesn't expect material premium rate rises this year, despite some increases in the January and April renewals.

The sector's resilience reflects the benefit of business diversification, as profits from life and health business, and solid investment returns tended to more than offset underwriting losses on property and casualty business from last year's large catastrophe claims. The four main European reinsurers - HANNOVER Re, MUNICH Re, SCOR and Swiss Re - all posted profits in 2017, despite significant catastrophe losses, and reported end-2017 capital at or above their stated optimal ranges.

SCOR maintained its share buy-back plan, while MUNICH Re and Swiss Re announced increases to theirs of up to EUR 1 billion and CHF 1 billion, respectively, and HANNOVER Re maintained its special dividend payments. All four said they would still have capital available to invest in growth opportunities or for further returns to shareholders. The continued abundance of capital in the sector, helped by capital influx from insurance-linked security investors, makes significant rate rises unlikely. Rates have been broadly stable this year, with rises limited and well short of offsetting the declines of the past four years.

Large conglomerates continue to show interest in the reinsurance sector in Europe and globally. Japanese telecoms company SoftBank is in talks with Swiss Re over acquiring a stake of up to 10% and there could be more deals involving Bermudan reinsurers, following recently announced deals between AIG and Validus, and AXA and XL Group.

Fitch's outlook for the global reinsurance sector remains negative, reflecting continued pressure on earnings from competitive pricing, alternative capital and low investment yields. Combined ratios, normalized for an average level of reserve releases and catastrophe losses, have steadily deteriorated.

The report "European Reinsurers Resilient to Catastrophe Losses" is available at www.fitchratings.com.

Related articles

Why should you participate at FIAR 2018?

With an exclusive list of professional speakers, 7 conferences and workshops analyzing current trends and issues on the re/insurance markets, as well as hundreds of bilateral meetings and networking opportunities, FIAR 2018 represents a key event on the business agenda.

2018-04-25

What re/insurance professionals are already on FIAR 2018's list of speakers?

Specialists from ICMIF - International Cooperative Mutual Insurance Federation and PensionsEurope, representatives of national insurance associations from Austria and Turkey, as well as professionals representing SWISS Re, GEN Re and AUDATEX are just a few of the speakers who have already confirmed their presence at FIAR 2018 - The International Insurance-Reinsurance Forum.

2018-04-19

ON THE MOVE

Zurich: leadership transition in EMEA business

Currently group CEO of AXA UK and Ireland, Amanda BLANC will also join the executive committee at ZURICH, with the handover scheduled to complete in the fourth quarter of 2018. BLANC is to succeed Gary SHAUGHNESSY as CEO of ZURICH Insurance's EMEA business.

12.04.2018

TOP EVENT

Why should you participate at FIAR 2018?

With an exclusive list of professional speakers, 7 conferences and workshops analyzing current trends and issues on the re/insurance markets, as well as hundreds of bilateral meetings and networking opportunities, FIAR 2018 represents a key event on the business agenda.

25.04.2018

What re/insurance professionals are already on FIAR 2018's list of speakers?

Specialists from ICMIF - International Cooperative Mutual Insurance Federation and PensionsEurope, representatives of national insurance associations from Austria and Turkey, as well as professionals representing SWISS Re, GEN Re and AUDATEX are just a few of the speakers who have already confirmed their presence at FIAR 2018 - The International Insurance-Reinsurance Forum.

19.04.2018

photodune-3834701-laughing-girl-xs

LIVE: Moscow, Russia: The XXII International Reinsurance Conference

The XXII International Reinsurance Conference has started today in Moscow, organized by Delovoy Format, with the support of the Russian Insurers Association. XPRIMM, the traditional Media Partner of the conference, has launched on the occasion the latest edition of its Insurance Profile Russia, providing for 2017 insurance statistical data.

11.04.2018

photodune-3834701-laughing-girl-xs

The 4th edition of the European Consumer Protection Conference: Main conclusions

The European Consumer Protection Conference, taking place on Thursday, 22 March, in Prague, brought into debate the consumer environment in the current European regulatory and economic landscape, the upcoming legislative changes that will benefit consumers and users of insurance and private pension products, as well as digitalization and the impact of technological advances in the field of financial services.

22.03.2018

See all