Reinsurance News

Europe’s major reinsurers grew 11% at mid-year 2021 renewals: Litmus Analysis

2nd September 2021 - Author: Luke Gallin

Europe’s four major reinsurers renewed roughly €12 billion of treaty premium at the mid-year 2021 reinsurance renewals, with an average risk-adjusted price increase of 2.1%, according to research from Litmus Analysis.

growthThe €12 billon of renewed treaty premium represents growth of 11%, which is an improvement on the 5% growth recorded by the cohort of reinsurers for the mid-year 2020 renewals.

However, it appears that premium rate increases have slowed at mid-year 2021, as the average risk-adjusted price increases fell from 4.9% for the group at the mid-year 2020 renewals, to 2.1% this year.

While the mid-year reinsurance renewals were largely favourable for reinsurers, Litmus highlights some substantial differences between Swiss Re, Munich Re, Hannover Re, and SCOR.

In terms of overall growth, Hannover Re achieved the most with 15% in renewed premiums, which is almost double the 8% achieved by SCOR.

But in terms of rate rises, SCOR led the way achieving nearly 8%. On the other end of the spectrum, Swiss Re achieved average rate changes of just 0.7% at the mid-year 2021 renewals.

Over the last six quarters, SCOR leads the way with an average quarterly rate increase of 6.3%, followed by Swiss Re at 5%, Hannover Re at 4.3%, and Munich Re at 2.3%.

“This report highlights some key differences across the four major reinsurance groups at the recent renewal – and this could have implications for the way they approach negotiations as we move towards the much bigger year-end renewal. Some groups are clearly pushing for price increases – and succeeding – while others may be taking a more nuanced approach. Buyers may find the detail here interesting and informative as they open negotiations,” said Lewis Phillips, Senior Consultant.

Stuart Shipperlee, Head of Analysis, added: “It’s interesting that both Munich Re and SCOR made a point of stressing that buyers are looking for high levels of financial strength backing long-term relationships. With their very high ratings they might be expected to say that, and the pricing increases achieved don’t necessarily prove the point.

“Nonetheless it is not difficult to see how the last 18 months will have further heightened cedants’ focus on reinsurer financial strength ratings and their likely resilience to severe stress.”

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