Major European Reinsurers' Profits Improved during First Half of 2021

The four major European reinsurers experienced very strong improvement in profitability during the first half of 2021, according to Fitch Ratings.

The rating agency said the four reinsurers—Munich Reinsurance Company, Swiss Reinsurance Company Ltd., Hannover Rueck SE, and SCOR SE—saw significant year-over-year profit improvements during this year's first 6 months.

The improved profitability followed significant price increases in property and casualty reinsurance and high demand for reinsurance protection, Fitch said.

"Premiums grew substantially, underwriting margins increased, and capital adequacy improved, remaining very strong," Fitch said in a statement. "Excess mortality losses in relation to the coronavirus pandemic and falling reinvestment yields were the two most significant challenges to reinsurers."

Prices increased less at the June and July 2021 renewals than at renewals in January and April, Fitch said, with price increases constrained by sufficient reinsurance capacity and a strong level of profitability for the entire reinsurance sector.

Fitch said the four major European reinsurers are well positioned to cope with a high level of natural catastrophe claims during the second half of this year because of the strength of their earnings and capital during the first half of 2021.