Europe's Big Four Reinsurers Maintain Strong Performance Amid Hard Market

Europe's four largest reinsurers delivered robust results in 2023 and the first half of 2024 in their non-life reinsurance segments, driven by favorable pricing and terms, according to a recent report by A.M. Best.

The report, titled "Global Reinsurance—The European Big Four," is part of A.M. Best's analysis of the global reinsurance industry. This analysis also includes A.M. Best's rankings of top global reinsurance groups and detailed examinations of the insurance-linked securities, Lloyd's, life/annuity, health, and regional reinsurance markets.

The report highlights the challenges in comparing earnings among the Big Four reinsurers due to changes in reporting standards. Munich Re, Hannover Re, and SCOR adopted International Financial Reporting Standard (IFRS) 17 for their 2023 financials, while Swiss Re continued reporting under US generally accepted accounting principles (GAAP). The differences in standards—such as the use of discounted combined ratios under IFRS 17 versus undiscounted combined ratios under US GAAP—complicate direct comparisons, particularly with metrics from years before 2022. Additionally, variations in disclosures and measurement models further hinder comparisons, even among those using IFRS 17.

Despite these challenges, A.M. Best observed that the European reinsurers tend to have more stable return on equity over time. Moreover, the life books of these companies, with the exception of SCOR's recent reserve review, have generally provided a stabilizing effect, contributing to their overall diversification.

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