Munich Re and Swiss Re among top tier global reinsurers by business profile

Written by Adam Cadle

12/08/2020

The four major European reinsurers - Munich Re (Insurer Financial Strength (IFS) Rating AA/Stable), Swiss Re (IFS Rating A+/Stable), Hannover Re (IFS Rating AA-/Stable) and SCOR SE (IFS Rating AA-/Stable) - are among the top tier of global reinsurers by business profile, Fitch Ratings has said.

Large franchises and a high degree of diversification underpin Fitch's assessment of very strong business profile for each group.

The capital adequacy of the four groups, based on Fitch's Prism Factor-Based Capital Model (Prism FBM) assessment, is 'Very Strong'. The regulator-assessed solvency coverage for each group is consistent with Fitch's Prism FBM assessment of 'Very Strong'.

"Maintaining very strong earnings metrics in challenging market conditions is an important differentiator for 'AA' rated companies compared with lower-rated insurers," the ratings agency said.

"Three of the four reinsurers generated a satisfactory net income return on equity (ROE) of 10% on average for 2019 due to positive contributions from life and health reinsurance and solid investment returns, while large catastrophe and man-made losses aligned with the long-term average. Swiss Re had reserving deficiencies and high claims inflation in the US casualty book, leading to a low ROE of 3%."

Related Articles