Fitch Ratings said Europe’s four largest reinsurers have reached peak profitability in property and casualty reinsurance, reporting a record-low average combined ratio of 81.5% in the first half of 2025.
The result reflects strong attritional performance, limited catastrophe losses, and favorable market conditions.
The sector benefitted from prior rate increases still earning through, stable contract terms, and large loss events that stayed within or below budget.
A major boost came from IFRS 17 accounting, which reduced combined ratios by about nine percentage points on average, nearly doubling the benefit seen in the first half of 2024.
Munich Re delivered the strongest P&C combined ratio among its peers, despite a slight weakening. Its diversified portfolio and decision not to strengthen reserves in H1 supported a positive run-off result, keeping the ratio below its annual target.
Hannover Re posted an 88.4% ratio, missing its target as higher reserving prudence outweighed benefits from underlying reserve releases.
The company also faced large man-made losses that came in above budget. Fitch said Hannover Re’s approach reflects a conservative stance, adding resilience at the cost of near-term profitability.
Swiss Re and SCOR also used robust underwriting results to increase reserves, a move Fitch described as supportive of long-term adequacy.
While Swiss Re’s positive developments were partially offset by reserve additions, Hannover Re’s were fully offset.
Both Munich Re and Hannover Re already held substantial reserve buffers, having adopted “best estimate plus margin” methodologies earlier than Swiss Re and SCOR.
Fitch concluded that the sector’s profitability is at its strongest in years, with reserve strategies differentiating near-term results across firms but reinforcing balance sheet strength for future periods.
