Big four European reinsurers P&C combined ratio improves to 86.3% in 2024: Fitch

By Michael Jones

March 28 - (The Insurer) - Europe’s four largest reinsurers have improved their average P&C combined ratio to a record 86.3% in 2024, Fitch Ratings said in a commentary.

Hannover Re and Munich Re saw combined ratio improvements in 2024, while Scor and Swiss Re saw deteriorations. Prior-year U.S. liability reserve additions also contributed 10.2 percentage points to Swiss Re's combined ratio.

However, Fitch said this means Swiss Re’s reserves are now at the upper end of “best estimates” in 2024, which was supportive of more stable future reserve developments.

Reserving prudence was a theme for the other European reinsurers, which Fitch said had a positive impact on its assessment of reserving risk.

Natural catastrophe losses were below budgeted amounts for the second year for the quartet. Fitch said this was due to the vast majority of insured losses being high-frequency, low-severity weather events that were absorbed by the insurance market.

Fitch warned that 2025 may be a more difficult year for reinsurers to remain within cat budgets, as anticipated LA wildfire losses of around $40 billion would consume approximately 35% of European reinsurers’ annual natural catastrophe budgets.

The rating agency has maintained its neutral outlook for the global reinsurance sector in 2025.

“On the credit-positive side, we expect the sector to maintain its healthy normalised underwriting margin, driven by the earn-through of past rate increases, pricing levels remaining attractive, steady T&Cs and a robust primary P&C market”, Fitch said.

These positive factors are balanced by the market showing moderate signs of softening due to increasing reinsurance capacity, alongside continued rising claims costs and high catastrophe losses due to social inflation and climate change.