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‘Big Four’ renewals highlight improved P&C rating environment

Introduction and Executive Summary

The big four European reinsurers (Hannover Re, Munich Re, SCOR and Swiss Re) together represent around one third of global P&C reinsurance premiums, and their January renewals encompass close to half of their traditional treaty reinsurance premiums.

In essence acting as a bellwether for the market as a whole, these groups tend provide more detail than their Bermudian and international peers, their experience acting as a useful indicator for the market as a whole. In addition to commenting on their individual experience, Litmus uses their disclosures to present a composite picture.

  • Individual experience on 1st January renewals reflects diverging priorities; however, composite experience paints an improving picture
  • The combined portfolio grew by 5%, reflecting an overall increase on renewals as well as strong new business growth across almost all core business lines
  • Risk-adjusted pricing rose overall, with price increases across almost all lines and territories – especially on loss-affected business
  • Terms and conditions were claimed by all to have tightened, including the introduction of infectious disease exclusions in certain classes
  • Each of the companies also stated their expectation that these favourable trends would continue through subsequent 2021 renewals

Experience of the European ‘Big Four’ suggests disciplined approach to 2021 reinsurance renewals but with divergent outcomes for growth

Once again, the big four European reinsurance groups reported divergent results from the 1 January 2021 renewals, with SCOR, Munich Re and Hannover Re taking advantage of favourable market conditions to grow their book by 16%, 11% and 9%, respectively, while Swiss Re’s priority was on margins, resulting in an 11% contraction.

1 January is a very important date in the reinsurance industry’s calendar, as the renewal date for the bulk of European P&C treaties and much other business around the world. All the major reinsurers provide some commentary on their January renewals, but the big four European reinsurers (Hannover Re, Munich Re, SCOR and Swiss Re, who together represent around one third of global P&C reinsurance premiums) provide more detail than their Bermudian and international peers. In this summary report, we examine the public disclosures from these companies, and have aggregated the four to present a composite picture.

For this group, around half of traditional treaty reinsurance premiums were up for renewal at 1 January 2021. Other important dates are 1 April (when Japanese and other Asian business renews), 1 June (Florida cat) and 1 July (some US, Australasia and other global programmes). Facultative and specialty business renewal dates are less easy to define as they are spread throughout the year.

Combined result of 1 January 2021 renewals

We have combined the reported renewal experience of the four groups, and the overall picture is shown above. The development of the renewal is shown in the top waterfall chart. EUR 28.4bn of treaty reinsurance premiums were up for renewal. Of this 9% was cancelled or replaced (which includes reductions in shares on renewing treaties as well as business declined and not renewed), giving a total of EUR 25.7bn which was renewed. The 4% increase at renewal represents both the effect of price changes and increases in shares on treaties. New business contributed an additional 10%, benefiting from growth across virtually all core business lines. The combined portfolios grew 5%, which was the same as that reported at 1 January 2020.

Each of the companies in our study reported an overall rise in risk-adjusted pricing, ranging from 2.4% for Munich Re to 7.8% for SCOR, with price increases across almost all lines and territories, especially on loss-affected business. Terms and conditions were said to have tightened, including the introduction of infectious disease exclusions in certain classes.

Each of the companies in our study commented that the favourable trends experienced at the January renewals were expected to continue through the later renewals during the year.

The overall rate and premium development at renewal reported by the four companies is presented in the bubble chart. SCOR reported the biggest growth in premium volume, up 16%, while Swiss Re’s renewed premiums declined by 11%. SCOR said it benefited from strong growth in its Fast Growth Markets segment; Swiss Re said the contraction in its book was a result of portfolio de-risking actions and reductions in aggregate property exposures and cuts to large casualty shares.

The pie chart shows the distribution of the EUR 29.8bn of renewed premium across the four groups.

For a copy of the complete report or for further information about Litmus Analysis and the services it provides please contact

Lewis Phillips
Consultant Analyst

Lucy Stupples
Consultant Analyst

Sources: Company disclosures. Swiss Re reports in US dollars; for the purpose of this aggregation, its figures have been converted into euros using the 1 January 2021 exchange rate of USD 1 = EUR 0.815

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  1. Many thanks to Litmus, Lucy and Lewis.

    Very informative and particularly helpful at this time of distancing.

    Look forward to the next episode!

  2. Interesting to read how resiliant these reinsurers are

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