International credit ratings and research agency Fitch Ratings said Europe’s four largest reinsurers posted strong earnings performance in the first quarter of 2026, although overall revenue growth fell as market conditions turned unfavorable.
Fitch Ratings said in its latest assessment that Munich Re, Swiss Re, Hannover Re and SCOR SE will have an average annualized return on equity of 21.4% in the first quarter of 2026, up from 17.5% in the same period last year.
The agency attributed the improvement primarily to stronger underwriting performance in its property and casualty (P&C) business, supported by lower levels of primary claims activity.
Fitch Ratings reported that the four reinsurers’ combined revenue fell by about 5% year-on-year. The decline was due to lower pricing within the property and casualty insurance market, lower renewal volume and the impact of a weaker U.S. dollar. The agency also pointed out that during the renewal period in April 2026, price pressure continued to increase, with the average price reduction reaching 3.7%.
Fitch Ratings said the four reinsurers are well-positioned to achieve their 2026 profitability targets despite softer pricing conditions. The agency said it expects the industry to continue to prioritize underwriting discipline and earnings quality over expansion as market and macroeconomic conditions become more challenging.
Fitch Ratings said the average property and casualty insurance combined ratio improved to 77.5% in the first quarter of 2026 from 87.2% in the same period last year, exceeding peers’ full-year targets. The agency said the strong underwriting results were primarily due to fewer large loss claims, unlike losses related to the Los Angeles wildfires in the first quarter of 2025, which were much higher than quarterly expectations.
The report also highlights sizable discount offers ranging from 9.5% to 12%, as well as favorable reserve developments in previous underwriting years. Fitch Ratings noted that some reinsurers have chosen to further strengthen reserves, notably Hannover Re, which has a more prudent balance sheet.
Fitch Ratings said SCOR, Munich Re and Swiss Re all increased their reserves related to the Iran-US conflict, with Swiss Re’s reserves seeing the largest increase of $400 million. At the same time, Hannover Re relied on unused large loss budget allowances while continuing to strengthen its overall reserve resilience.
Fitch Ratings described the performance of the Life and Health (L&H) business as varied but generally stable. The agency said contractual service margin (CSM) releases remained stable across the industry, while mortality-related experience was positive for most reinsurers.
Hannover Re and SCOR both reported higher new business CSM levels compared with the previous year, supporting future earnings potential. Swiss Re was the only company to see a decline in CSM as it posted more business than new business was generated during the quarter.
Fitch Ratings added that investment returns remain generally supportive. The average return on investment in the first quarter of 2026 was 3.4%, slightly lower than the 3.7% in the first quarter of 2025. The agency said recurring investment income continued to benefit from higher reinvestment yields, although this was partially offset by negative fair value changes, particularly at Munich Re.
Fitch Ratings said the capital strength of the four European reinsurers remains strong, with solvency ratios at or above the upper end of their target ranges.