Europe’s largest insurers achieve record earnings in 2024, but face challenges: Moody’s

According to a report from Moody’s, a global credit ratings, research, and risk analysis firm, Europe’s four largest primary insurers—Allianz, AXA, Generali, and Zurich Insurance —have reported record earnings for FY 2024, collectively reaching €28.6 billion, a 15% increase from the previous year.

Moody’s attributes these strong results to solid performances across all key divisions, with property and casualty (P&C) insurance and life and health (L&H) segments driving much of the growth.

The continued success in these sectors highlights the insurers’ robust positions in the market and their ability to navigate challenging economic environments.

The insurers demonstrated significant premium gains across both P&C and L&H sectors, with P&C premiums rising by 9% and L&H premiums increasing by 14%.

Moody’s emphasised that these increases were driven by price hikes and greater exposure, particularly in retail insurance. The L&H sectors benefitted from higher new business sales and lower policy surrenders, particularly in France and Italy. While the insurers exceeded their earnings targets for 2024, Moody’s expects slower profit growth in 2025, influenced by rising geopolitical risks and market uncertainties.

The P&C business was particularly strong in 2024, buoyed by both retail and commercial lines. Premium revenue, particularly in retail insurance, significantly boosted underwriting results, as insurers continued adjusting prices to respond to inflation in claims costs.

Allianz and Zurich were among those reporting improvements in their commercial combined ratios. Despite this, commercial pricing momentum showed some signs of slowing down, especially in certain markets. However, retail P&C lines saw significant improvement across most European regions.

Moody’s noted that the L&H business rebounded in 2024, showing growth after a slower 2023. This was driven by higher releases from the contractual service margin (CSM) and improved technical margins.

The protection and health insurance sectors, in particular, performed well, with AXA reporting a significant turnaround in its UK health insurance business.

While some volatility was experienced due to economic factors like widening sovereign credit spreads, the overall trend in L&H remained positive. New business in the L&H sector grew by an average of 17% across the four companies, with Allianz and Generali seeing particularly strong results—up 20% and 30%, respectively. This growth was fuelled by a diverse mix of protection and savings products tailored to market demands.

According to Moody’s, the insurers reported stable solvency ratios, supported by strong capital generation. However, substantial shareholder returns, including dividends and share buybacks, partly offset these gains.

Despite a solid capital foundation, the insurers remain committed to progressive dividend policies, which may limit financial flexibility in times of economic stress. Moody’s also highlighted that their cautious outlook for capital management in 2025 could be influenced by rising geopolitical tensions and volatile financial markets.

Moody’s also pointed out the value of geographical diversification in strengthening these insurers’ positions. Allianz, AXA, and Generali have established dominant positions in their home markets (Germany, France, and Italy, respectively), while maintaining significant footprints across Europe and other regions.

Zurich, with its focus on P&C and commercial lines, has a strong presence in North America. This geographical spread has helped mitigate risks from natural catastrophes and has been instrumental in diversifying earnings.

While investment returns in 2024 were robust, buoyed by healthy interest rates and stable financial markets, the outlook for investment results in 2025 is more uncertain.

Moody’s indicated that rising geopolitical risks and potential market volatility could impact investment performance. The mixed outlook for investments is an area of concern as insurers must navigate broader market uncertainty, including potential economic slowdowns.

Looking ahead to 2025, Moody’s expects slower profit growth, though P&C performance is expected to continue benefiting from price increases and exposure growth.

However, the momentum in commercial pricing is likely to slow. The shift towards shorter-term contracts in the L&H business, particularly for AXA and Zurich, could limit CSM growth. In contrast, Allianz and Generali, with their focus on long-term life savings, appear better positioned for growth in this area.

Despite these challenges, Moody’s believes that the insurers remain well-positioned for further market share expansion. Their diverse portfolios, strong capital management, and geographical spread provide a solid foundation for the future.

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