Moody’s Ratings, a provider of credit ratings, research and risk analysis, reported that the four biggest European reinsurers — Munich Re (insurance financial strength rating Aa3, positive outlook), Swiss Re (Aa3 stable), Hannover Re, and SCOR (A1 stable) — achieved record combined earnings of €7.3 billion in the first half of 2025.
Moody’s said that profitability in property and casualty reinsurance was aided by lower natural catastrophe claims and by improved investment income.
The agency stressed that reinsurers have not compromised on underwriting discipline even as property reinsurance prices have begun to fall.
In many cases, this has resulted in flat or negative business growth at renewals, particularly in casualty reinsurance, despite rising prices. Moody’s highlighted that this cautious stance reflects a commitment to preserving long-term profitability.
According to Moody’s, specialty lines and life reinsurance remain important contributors to earnings diversity. Growth in specialty business has been notable, with reinsurers making it a strategic focus, while life reinsurance results were generally strong even if slightly weaker than the previous year in some instances.
Moody’s pointed to the sector’s expanding contractual service margin as an indication that life reinsurance profits are set to remain robust over the coming years.
Moody’s also noted that foreign exchange fluctuations created headwinds for euro-reported results, as the euro’s appreciation negatively affected earnings, equity and contractual service margins for several firms. Swiss Re, which reports in US dollars, experienced the opposite effect, benefiting from currency movements.
In Moody’s view, the substantial US exposure of many reinsurers, particularly in life reinsurance, will keep earnings sensitive to exchange rate volatility in the near term.
Moody’s underlined that the balance sheets of the four reinsurers remain strong, with broadly stable solvency ratios at the end of June 2025. The agency explained that prior reserve strengthening and conservative capital positions leave these companies well placed to withstand potential shocks, including major catastrophe losses.
Looking ahead, Moody’s cautioned that declining property reinsurance prices could put pressure on overall profitability.
However, the agency emphasised that reinsurers are not loosening their terms and conditions, and total premium volumes are in fact shrinking faster than pricing. SCOR, for example, recorded an 11% fall in premiums in the first half of 2025, which Moody’s cited as evidence of continued discipline in a competitive market.
Finally, Moody’s stressed that investment performance has become a key support for profitability. Reinvestment yields reported in the first half of 2025 were higher than current running yields for all four companies, which, according to Moody’s, signals that investment returns are likely to rise further in the months ahead.
About the Author
