Price declines reported so far by European reinsurers are much less severe than the figures reported by reinsurance brokers, aided by diversified portfolios which help to buffer the impact, according to JP Morgan analysts.
The report from JP Morgan states that European reinsurers struggled at the start of 2026, falling 4.2% on average (worse than the SXIP’s 2% drop). Hannover Re and Munich Re saw the largest declines, down 7% and 6%, respectively, while Swiss Re fell less, and SCOR actually posted a YTD share price increase.
“The main driver has been positioning in the space, in our view, with top down themes driving performance. Reinsurance fell out of favour after the reinsurance brokers reported the highest price declines since the late 1990s with Guy Carpenter pointing to 12% price declines at the January renewals,” JP Morgan explains.
Reinsurance brokers reported significant price drops for property catastrophe business, with prices reduced 12% for the Global property catastrophe business, 15% for Europe and 12% for the US, although this was from a high base.
Property cat pricing saw its largest decline since the last “soft cycle” (2013-2017) at 11.2%, according to Guy Carpenter data. A larger annual price decrease for property cat has not been recorded since 1998, which saw a 15% drop.
Current pricing levels remain higher than those in 2022 (before the significant rise in 2023), but the difference has narrowed to approximately 7% from the roughly 30% gap observed during 2024, according to analysts.
“Broker reports suggest that attachment points have largely held up, so profitability is likely still better than the pricing level suggests, but it has materially reduced in the last 2 years,” said analysts.
European reinsurers tend to report price changes on a more diversified basis than reinsurance brokers, and these changes are never as dramatic as those the brokers report.
SCOR and Hannover Re have recently announced price changes, with a 1.9% decline reported by SCOR and a 3.2% decline by Hannover Re. These price reductions raise questions about top-line growth potential, as lower prices typically make growth more challenging.
SCOR managed to achieve top-line growth near 15%, significantly exceeding its 4-6% target. This was driven by a 4.7% growth in its traditional book and an increase of over 80% in its alternative solutions business.
Hannover Re’s premium increased by 3.3% at the January 2026 renewals. This figure fell short of the company’s guidance for 2026, which anticipated a mid-single-digit level increase, analysts noted.
“We think that the price declines relative to the brokers headlines are reassuring. But we had not expected anything different. Top lines have been more mixed however, with Hannover Re maintaining its mid single digit growth guidance despite achieving growth of 3.3% at the January renewals,” JP Morgan concluded.
