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Fitch flags earnings risks for Europe’s top reinsurers from renewal price cuts
Fitch expects the adverse impact of multiple rounds of renewal price reductions to become more pronounced and feed through to earnings in coming quarters, as pricing declines accelerated from January 2025 to the mid-year period.
Fitch Ratings said Europe’s four largest reinsurers, Munich Re, Swiss Re, Hannover Re and SCOR, posted a stable, record average return on equity of 21.5% in the first half of 2026, supported by underwriting and investment results.
The rating agency warned, however, that the cumulative effect of several consecutive rounds of renewal price reductions is likely to weigh on earnings in the coming quarters. Fitch noted that despite benign large-loss experience and strong investment results, revenue contraction accelerated to 2.7% in H1 2026 from 1.1% in H1 2025, with property and casualty revenue down 9.4%, partly offset by life and health up 3.8%.
Fitch said the big four reinsurers have protected margins by prioritizing profitability over growth at recent renewals, which it believes helps them meet ambitious full-year 2026 profitability targets even as revenue for most lines declines.
Still, Fitch expects the adverse impact to intensify as renewal pricing continues to soften. It said pricing declines widened from the mid-teens at January renewals to the high teens in April, and reached 20% to 25% at the mid-year renewal period, with nat cat lines seeing more pronounced drops, while casualty prices were broadly stable at mid-year.