London:
The 9M20 results of the four major European reinsurers – Munich Reinsurance Company (Insurer Financial Strength (IFS): AA/Stable), Swiss Reinsurance Company Ltd (IFS: A+/Stable), Hannover Rueck SE (IFS: AA-/Stable) and SCOR SE (IFS: AA-/Stable) – revealed that fewer new pandemic-related claims reserves were booked in 3Q20 than in 2Q20. Event cancellation covers was the only affected business line that required major adjustments to expected claims, Fitch Ratings says.
Despite the pandemic-related claims incurred in 9M20, Hannover Re, Munich Re and SCOR SE remained profitable.
Meanwhile, Swiss Re substantially reduced its net loss, which had been reported after six months, in 3Q20. These relatively strong results were possible as a fairly light natural catastrophe loading and an improvement of the underlying underwriting result helped to compensate for losses related to the coronavirus crisis.
All four major reinsurers have remained well capitalised so far in 2020, which was partially achieved by the issuance of subordinated debt. This allowed for strong premium growth in reinsurance, driven by higher prices, rising demand in Asia, and an increased risk appetite.
Going into 2021, the sector expects risk-adjusted prices in property and casualty reinsurance to rise further, while Fitch believes that the pandemic-related claims burden will reduce progressively due to the exclusion of pandemic covers in renewed treaties.