Analysts predict mixed Q1 fortunes for big 4 European reinsurers

Analysts have a mixed forecast for Europe's big four reinsurers when they report first-quarter earnings as the group benefits from more muted catastrophe losses but battles weaker life and health results.

Munich Re and Hannover Re will both report year-over-year increases in net income available to stockholders of more than 52%, according to an analyst consensus from Visible Alpha. Profits at Scor SE are expected to be almost flat year over year, while Swiss Re AG's are predicted to fall 11.1%. Swiss Re's anticipated profit decline is a more modest 5% in its reporting currency of US dollars.

Property and casualty profits up

All four of the reinsurers are set to report improved underwriting performance in property and casualty (P&C) reinsurance. Munich Re is expected to show the biggest improvement with an 8.8-percentage-point improvement in its P&C reinsurance combined ratio to 75.1%. Hannover Re is forecast to see its combined ratio decline by 8.3 points.

The combined ratio is a measure of P&C underwriting profit, where a lower percentage indicates a higher underwriting profit.

With the exception of Scor, the reinsurers reported lower underwriting profits in the first quarter of 2025 because of claims from wildfires in Los Angeles in January of that year. The blazes cost the industry $40 billion, according to Swiss Re.

The first quarter of 2026 was relatively quiet for natural catastrophes. Insured catastrophe losses were $20 billion in the quarter, lower than the $123 billion in the prior year and under the 10-year average of $26 billion, according to Gallagher Re.

The expected improvement in P&C reinsurance underwriting performance comes despite potential claims for reinsurers from the Middle East war. Comments from reinsurance executives shortly after the war started in late February suggested that claims would be manageable for the insurance and reinsurance industries. However, the conflict has dragged on longer than initially expected, which could mean more business lines end up being affected.

Life profits fall

Underwriting profitability in the big four reinsurers' life and health (L&H) reinsurance businesses is expected to be weaker. Munich Re is forecast to see the biggest fall in insurance service result for L&H reinsurance with a 24.7% decline. Hannover Re is set to report the smallest drop at 2.2%.

Munich Re's life and health reinsurance business performed strongly in the first half of 2025, with its total technical result of €608 million beating guidance, in part thanks to positive experience variance in its US portfolio. CEO Christoph Jurecka, at the time Munich Re's CFO, told analysts not to consider the first-quarter 2025 result as the new run rate, as the company did not expect the positive experience variance in the US to repeat.

Swiss Re is the exception. While the figures in euros indicate an expected fall in Swiss Re's L&H reinsurance service result, it should actually report a modest increase when expressed in US dollars.

Swiss Re's L&H reinsurance business missed its $1.6 billion full-year profit target in 2025, making a profit of $1.3 billion. The result was dragged down by remedial work on underperforming business in Australia, Israel and South Korea following a portfolio review. With the review complete, Swiss Re is forecasting a $1.7 billion L&H reinsurance profit for this year.

Investment mix

Analysts expect a range of outcomes for the big four reinsurers' net investment income. Munich Re's investment income is forecast to jump 43.1%, while Scor's is set to tick up by 1.1%. An almost flat investment return is expected for Hannover Re, while Swiss Re's investment income is anticipated to decline by double-digit percentages.

Munich Re's investment result took a hit in the first quarter of 2025 because higher interest rates in Europe reduced the fair value of fixed-interest securities in the quarter.

Swiss Re's investment return, on the other hand, got a boost in the first quarter of 2025 from higher recurring investment income and realized gains from the sale of a minority equity position.

Visible Alpha is part of S&P Global Market Intelligence.