Despite the H120 results from the four major European reinsurers – Munich Re, Swiss Re, Hannover Re and SCOR – revealing considerable pandemic-related claims, the impact of the pandemic on the four reinsurers varied significantly.
This is in part due to differences in exposure to lines of business affected by the pandemic.
Fitch’s considers the reinsurers’ credit fundamentals mostly in line with its original assessment at the beginning of the pandemic, although pandemic-related losses were larger than originally anticipated.
Fitch notes how the pandemic is an earnings event, even though the final losses are highly uncertain, and that the underlying financial performance of the four major reinsurers remains strong, as does capitalisation.
All four reinsurers reported an accelerating price momentum for the June and July 2020 renewals.
Fitch underlines how the industry has undertaken a more disciplined approach so as to protect earnings from pandemic-related claims and lower investment income.
In addition, global capital markets are still accessible for reinsurers needing capital raises to strengthen their balance sheets or fund new growth, with Fitch estimating that more than $15 billion have been raised.
