According to Fitch Ratings, the four largest European reinsurers, Munich Re, Swiss Re, Hannover Re, and SCOR, reported a stable, record average return on equity of 21.5% in H1 2026, supported by strong underwriting and investment results. However, the rating agency expects the adverse effects of several consecutive rounds of renewal price reductions to weigh on earnings in the coming quarters.
As in 2025, Fitch explained that sustained underwriting performance across most business lines benefited from benign large-loss experience, while investment results remained strong in H1 2026.
Despite this, revenue contraction accelerated in the period to 2.7% from 1.1% in H1 2025, driven by property and casualty, down 9.4%, partly offset by life and health, up 3.8%.
The rating agency observed that the big four reinsurers protected margins by prioritising profitability over growth at recent renewals.
This, as per Fitch, supports its view that the reinsurers can meet ambitious full-year 2026 profitability targets despite likely declining revenue for most.
“Disciplined cycle management, broader business diversification and stronger releases from prior-year reserves are also likely to support earnings resilience as market conditions soften and claims costs rise,” the rating agency added.
Still, Fitch said that it anticipates the adverse impact of several consecutive rounds of price reductions at renewals to become more pronounced and feed through to earnings in the coming quarters.
Fitch Ratings added, “European reinsurers’ 2026 renewals again resulted in lower risk-adjusted prices for most business lines. This lowering has accelerated since January 2025 and has been more pronounced for nat cat lines.
“Pricing declines widened from the mid-teens at the January renewals to the high teens in April and up to 20%–25% at the mid-year renewal period. Specialty prices also softened on surplus capacity, while casualty prices held broadly stable at mid-year and recent renewals.
“The four reinsurers reiterated that renewal prices still adequately reflected the risks covered and that they kept terms and conditions, including attachment points, largely unchanged through the 2026 renewals, thereby helping to preserve strong profitability.”
