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Fitch flags rising catastrophe risk for German non-life insurers
Fitch forecasts the sector net combined ratio will climb to 95% in 2026 from 92% in 2025, while expecting premium growth of 4% for 2026 and 2027.
Fitch Ratings said German non-life insurers maintained strong underwriting discipline in 2025, with results outperforming expectations, even as it kept its view that underwriting metrics will face more pressure ahead.
In its outlook, Fitch forecast the sector net combined ratio at 95% for 2026, up from 92% in 2025, and expected stability in 2027. It cited a belief that rate increases should no longer exceed growth in claims, supporting steadier underwriting earnings.
Fitch estimated the sector net underwriting result at EUR 6.6 billion for 2025, supported by below-average natural catastrophe losses, and projected the normalised natural catastrophe result at EUR 3.5 billion to EUR 4 billion in 2025.
Looking to 2026 and beyond, Fitch expects higher reinvestment rates to support profitability, with investment returns rising to 2.8% in 2026 and 2.9% in 2027. It also warned that if premium growth falls below 2% or claims inflation runs higher than expected, the net combined ratio could exceed 95% in 2026, and it said sustained increases in the frequency of small- to mid-sized catastrophe events could make results more volatile and weigh on underwriting profitability.