Data compiled by Litmus Analysis shows that the largest four European reinsurers – Hannover Re, Munich Re, SCOR and Swiss Re – grew their combined portfolio by 5% at the January 2021 renewals.
Analysts at Litmus said the increase reflected strong new business growth across almost all core business lines.
The 5% portfolio growth was the same level that was recorded for this group in January 2020, but SCOR, Munich Re and Hannover Re actually grew their portfolios by a much larger amount at 16%, 11% and 9%, respectively.
They were offset by an 11% contraction at Swiss Re, due to portfolio de-risking actions and reductions in aggregate property exposures and cuts to large casualty shares.
Source: Litmus Analysis
However, representing around one third of global P&C reinsurance premiums, Litmus argues that this divergent performance is likely to reflect broader trends in the market as a whole.
For this group alone, around half of traditional treaty reinsurance premiums were up for renewal at 1 January 2021.
Between the four reinsurers, €28.4 billion of treaty reinsurance premiums were up for renewal, of which 9% was cancelled or replaced, giving a total of €25.7bn which was renewed.
A 4% increase at renewal reflected both the effect of price changes and increases in shares on treaties, Litmus noted, while new business contributed an additional 10%, benefiting from growth across virtually all core business lines.
Each of the companies reported an overall rise in risk-adjusted pricing, ranging from 2.4% for Munich Re to 7.8% for SCOR, with price increases across almost all lines and territories, especially on loss-affected business.
Terms and conditions were similarly reported to have tightened, including the introduction of infectious disease exclusions in certain classes.
All four reinsurers have also forecast that the favourable trends experienced at the January renewals are expected to continue through the later renewals during the year.
