AM Best: European "Big Four" Reinsurers Maintain Their Risk Appetites

According to AM Best's report, The European "Big Four" Reinsurers Maintain Their Risk Appetites, Europe's four largest reinsurers—Swiss Re, Munich Re, Hannover Re, and SCOR—delivered strong results in 2024. The performance was driven by favorable rate adequacy and disciplined underwriting, particularly with respect to policy terms and attachment points.

Per the report, all four companies are maintaining ambitious profit targets for 2025, despite a material impact from the California wildfires in the first quarter of the year. AM Best said their resilience highlights a capacity to absorb significant catastrophe losses while remaining focused on long-term financial objectives.

According to the report, the reinsurers continue to benefit from business written during the recent hard reinsurance market. AM Best noted that selective underwriting and disciplined capital allocation helped reinforce margins, providing a stronger base for earnings stability.

Per the report, adherence to strict policy terms and close monitoring of attachment points were central to the Big Four's success in 2024. AM Best emphasized that these practices not only helped manage volatility but also positioned the companies to withstand pressures from both catastrophe losses and shifting rate conditions.

While the California wildfires affected first-quarter results, AM Best said the reinsurers have not retreated from their profitability ambitions. The report pointed out that this reflects the strength of their long-term strategies, which are designed to navigate cyclical downturns and absorb catastrophic events without undermining balance sheet stability.

According to AM Best, there are emerging signs of rate softening in certain areas of the market. However, the Big Four's focus on disciplined risk selection and capital management provides a measure of protection against downward pricing trends. The report observed that these strategies are consistent with the companies' commitments to risk-adjusted returns.

Per the report, the reinsurance market overall has recalibrated following the hardening period, producing a more durable structure with reduced earnings volatility. AM Best said this environment has supported stronger margins while leaving reinsurers better prepared to manage ongoing challenges, including natural catastrophe exposure, new and evolving risks, and cyclical rate changes.

Looking ahead, AM Best concluded that Swiss Re, Munich Re, Hannover Re, and SCOR remain firmly committed to maintaining their risk appetites and pursuing long-term profit targets. According to the report, their combination of disciplined underwriting, careful capital deployment, and resilience to catastrophe losses underscores the ongoing strength of the European reinsurance sector as it enters 2025.

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