Analysts at JP Morgan have reported that European reinsurers recorded price declines as this year kicked but that the dip in the reinsurers’ price was much less severe than the figures reported by reinsurance brokers.
According to the firm’s analysts, the reinsurers were aided by diversified portfolios which helped to buffer the impact of the price drops in their operations.
A news report from Reinsurance News, an industry-focused online medium, on the JP Morgan’s research study on the reinsurance market indicated that European reinsurers struggled at the start of 2026, falling 4.2% on average (worse than the SXIP’s 2% drop).
Specifically, the report reflected that Hannover Re and Munich Re recorded the largest declines, down 7% and 6%, respectively, while Swiss Re fell less, and SCOR actually posted a YTD share price increase.
- Advertisement -
JP Morgan explained: “The main driver has been positioning in the space, in our view, with top down themes driving performance. Reinsurance fell out of favour after the reinsurance brokers reported the highest price declines since the late 1990s with Guy Carpenter pointing to 12% price declines at the January renewals.”
It added that reinsurance brokers reported significant price drops for property catastrophe business, with prices reduced 12% for the Global property catastrophe business, 15% for Europe and 12% for the US, although this was from a high base.
The firm also noted that according to Guy Carpenter data, Property cat pricing suffered its largest decline since the last “soft cycle” (2013-2017) at 11.2% and that a larger annual price decrease for property cat has not been recorded since 1998, which saw a 15% drop.
JP Morgan analysts further clarified that current pricing levels remained higher than those in 2022 (before the significant rise in 2023), but the difference has narrowed to approximately 7% from the roughly 30% gap observed during 2024, according to analysts.
They said: “Broker reports suggest that attachment points have largely held up, so profitability is likely still better than the pricing level suggests, but it has materially reduced in the last 2 years.”
The analysts observed that European reinsurers tended to report price changes on a more diversified basis than reinsurance brokers, and these changes are never as dramatic as those the brokers report.
It would be recalled that SCOR and Hannover Re recently announced price changes, with a 1.9% decline reported by SCOR and a 3.2% decline by Hannover Re. These price reductions raise questions about top-line growth potential, as lower prices typically make growth more challenging.
SCOR managed to achieve top-line growth near 15%, significantly exceeding its 4-6% target. This was driven by a 4.7% growth in its traditional book and an increase of over 80% in its alternative solutions business.
Hannover Re’s premium increased by 3.3% at the January 2026 renewals. This figure fell short of the company’s guidance for 2026, which anticipated a mid-single-digit level increase, analysts noted.
In their concluding note, JP Morgan analysts said: “We think that the price declines relative to the brokers headlines are reassuring. But we had not expected anything different. Top lines have been more mixed however, with Hannover Re maintaining its mid-single digit growth guidance despite achieving growth of 3.3% at the January renewals”
