Major European Reinsurers' 1Q Profit Growth Exceeds Expectations

The four major European reinsurers experienced stronger-than-expected improvements in their profits during this year's first quarter, according to Fitch Ratings.

The reinsurers' first-quarter results showed that better pricing and portfolio adjustments—as well as higher discount rates for non-life claims—produced better underwriting results on average for the group of reinsurers, the rating agency said.

The four European reinsurers—Munich Reinsurance Company, Swiss Reinsurance Company Ltd., Hannover Rueck, and SCOR SE—also saw benign financial market conditions and higher reinvestment yields supporting their investment results, Fitch said in a new report, European Reinsurance Dashboard: 1Q23 Results.

During the first quarter, the reinsurers experienced an average return on equity of 21 percent, up from 9 percent a year earlier, according to Fitch.

The reinsurers' solvency ratios remained strong during the first quarter, Fitch said, as strong generation of operating capital offset strains on capital from new business growth and capital repatriation.

"All four reinsurers took advantage of the very good market conditions and pushed through significant price increases during the renewal on 1 April, with a particular emphasis on Asia," Fitch said in a statement.