The European “Big Four” reinsurers—Swiss Re, Munich Re, Hannover Re and SCOR—still have appetite for property catastrophe, despite market conditions beginning to show signs of softening, according to a recent AM Best report.
“Although prices have softened in the 2025 renewals, discipline on attachment points and terms seem to be holding for now. Although there is no material sign yet of this discipline disappearing, the focus seems to have shifted to taking advantage of good pricing while it lasts,” said AM Best.
Sven Althoff, Member of the Executive Board for Property & Casualty at Hannover Re, echoed this view on the company’s earnings call, noting that its natural catastrophe risk appetite is growing.
At the mid-year P&C renewals, Hannover Re’s volume of business fell by 2.1%, driven by the reduction of a large contract. Without this, Hannover Re said that growth would have been 4.5%.
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At the same time, Munich Re CEO Joachim Wenning argued—following the release of the company’s H1’25 results—that there is no soft market in property catastrophe reinsurance, but rather that the period of no major losses for reinsurers has ended.
Munich Re did actually shrink its book at the mid-year renewals as certain business failed to meet its risk-return hurdles, although the firm’s CEO stressed that for the January 2026 renewals, he expects to see a continuation of attractive business opportunities.
Year-to-date, Swiss Re’s P&C Re achieved a treaty premium volume increase of 3%, highlighting continued growth of the portfolio through the year in spite of pulling back from casualty lines.
In 2025, the Big Four continued to post strong results for their non-life reinsurance segments, despite being heavily impacted by the California wildfires in Q1’25. “With this exception, the overall large loss environment has remained relatively benign year-to-date. This, combined with disciplined underwriting, rate adequacy and robust investment income, has allowed the groups to maintain full-year profit targets for 2025,” said AM Best.
Beyond property cat, AM Best said the Big Four are targeting growth in specialty lines such as cyber, marine, and engineering across both insurance and reinsurance, as part of efforts to diversify and stabilise earnings.
Looking back at 2024, the Big Four reported an average P/C reinsurance combined ratio of 86.4%, broadly in line with the averages for US and Bermudian players (89.5%) and Lloyd’s (86.9%).
By company, Swiss Re reported 89.9%, Munich Re 82.4%, Hannover Re 86.6%, and SCOR 86.3%, as reported by AM Best.
It is worth noting that the combined ratios for the Big Four are discounted, while those for US & Bermuda and Lloyd’s are not, although the discounting impact is partly offset by the risk adjustment required under IFRS 17.
The Big Four’s average return on equity (ROE) for 2024 was also in line with the US & Bermuda market composite, though Lloyd’s ROE of 21.2% was materially higher than the European average.
Despite the overall strong performance, AM Best highlighted persistent concerns about adverse development in US casualty books.
Since 2023, all four have used strong operating performance trends to further strengthen non-life loss reserves. Overall, reserve strengthening charges have been comfortably absorbed by profit margins in other non-life lines.
Life business remains a stabilising factor for the reinsurers, with 2024 overall being a profitable year despite some headwinds.
“With a healthy interest rate environment, improved underwriting discipline and increased demand for longevity and biometric (such as mortality) risk protection, it is expected that life business will continue to be a source of profitability and diversification for the “Big Four”, said AM Best.
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