According to an examination of the P&C treaty renewals from January 2024 of the big four European reinsurance groups (Munich Re, Hannover Re, Swiss Re, Scor) by Litmus Analysis, suggest that recent measures to improve the quality of their reinsurance book may be contributing to a more differentiated approach to managing risk appetites and underwriting strategies in the current business environment.

The main findings of the Litmus analysis are:

• Each of the four reinsurers achieved improvements in risk-adjusted pricing, and actively grew premium volume through the January 2024 renewals. However, the quantum of price and volume growth achieved varied considerably, with Swiss Re reporting the most substantial increase in risk-adjusted pricing and SCOR achieving the strongest overall portfolio growth.
• All showed an appetite to leverage strong demand for reinsurance capacity to increase exposure in preferred lines and geographies, while discontinuing business that failed to meet internal risk-return hurdles; all expressed cautious optimism for remaining 2024 renewals.
• With historic portfolio quality issues across the cohort seemingly now addressed, cohort members appear committed to a more individually nuanced approach to underwriting.
• With all four reinsurers focused on selective growth, aggregate premium volume grew by 7% across the cohort, compared with 2% reported in January 2023.
• Risk-adjusted pricing continued to improve overall, with further price increases achieved in many lines and territories that at least matched underlying loss trends and inflation.

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About Litmus

Litmus Analysis specializes in helping the re/insurance industry understand credit risk, the ratings agencies, and the financial analysis of (re)insurers. Its main areas of work are Ratings Advisory (helping companies manage their communications with the rating agencies), cedant analysis, (re)insurer selection and stress testing, market analysis, peer reviews & benchmarking and market security/counterparty credit risk management (including via the InsurTech application LITMUSQ).

The Litmus team of consultant analysts all have a senior rating agency and/or broker market security background and includes the former heads of S&P Ratings Europe (insurance), A.M. Best EMEA and A.M. Best Asia Pacific.