The four largest European reinsurers – Munich Reinsurance Company (Munich Re), Swiss Reinsurance Company Ltd (Swiss Re), Hannover Rueck SE (Hannover Re) and SCOR SE – achieved a record average return on equity (ROE) of 21.1% in the first half of 2025 (1H25).
Despite this strong performance, the reinsurance market is showing signs of softening. The June and July renewals saw a continuation of trends from earlier in the year, with a gradual decrease in pricing and a reduction in volumes across most lines of business, Fitch Ratings’ European Reinsurance Monitor: 1H25 revealed.
This has led to a slow down in premium growth. However, the four reinsurers have reported that they defended terms and conditions, including attachment points, thereby preserving profitability at a strong level, although below its peak.
Revenue growth at the July 2025 renewals ranged from -5.9% for Swiss Re to 0.5% for SCOR. The average revenue fall of 2.7% contrasts sharply with the 6.7% growth a year earlier. Hannover Re would have grown its book without the reduction of a large individual treaty in the US.
-->
This revenue decline was driven by price reductions and a deliberate reduction of business that did not meet the reinsurers’ targeted risk-return thresholds. This was particularly significant in US casualty, where rates adequacy is often not achieved, and in property, where prices declined the most.
Volume reduction was greater for excess-of-loss treaties than quota-share treaties, reflecting pricing becoming less attractive in reinsurance than in primary markets.
Reinsurers remained cautious regarding US casualty business. SCOR and Swiss Re, for instance, further decreased their exposure in this area. Reinsurers considered ceding commissions for US casualty business to be excessively high, even though pricing remained stable and was supported by rate increases in primary business.
Limited revenue growth was seen in specific areas such as underlying companies, certain property lines, and diversified specialty lines like marine for SCOR and agriculture for Swiss Re. Hannover Re’s structured reinsurance saw double-digit growth in 1H25.
In the property sector, some reinsurers, particularly Swiss Re, increased their exposure, but this was partially offset by rate changes.
“Reduced pricing and volumes at 2025 renewals, together with portfolio pruning (such as Swiss Re’s actions on US casualty) and other cycle-management measures, combined with US dollar depreciation, led to slower revenue growth in 1H25 for Munich Re and Hannover Re, and a fall for SCOR and Swiss Re. This underscores reinsurers’ prioritisation of profitability over growth as the reinsurance cycle turns,” Fitch concluded.
About the Author
