Global reinsurers’ earnings to remain favourable through 2025, says Fitch

Global reinsurers are expected to maintain strong earnings through the rest of 2024 and into 2025, thanks to generally adequate pricing and disciplined underwriting, according to a recent Fitch Ratings report.

In the first half of 2024, the 19 non-life reinsurers tracked by Fitch achieved a combined ratio of 84.2%, an improvement from 85.9% in the same period last year. This improvement is attributed to better underwriting profitability and manageable catastrophe losses.

“Underwriting results should remain favourable in 2H24 and 2025 as pricing is generally adequate,” said Fitch.

Non-life reinsurance net premiums increased by 6% in 1H24 from 1H23, reflecting strong performance during the reinsurance renewals, as market conditions remained favourable.

While premium growth is expected to persist, Fitch predicts it will slow as competition increases in the market.

For life and health (L&H) reinsurance, Fitch reported a 6% rise in pre-tax income for the first half of 2024. Profitability varied among companies based on their mortality and morbidity experience, but overall, increased investment income from higher interest rates benefited the entire group.

Additionally, shareholders’ equity increased by 6% in 1H24 from the end of 2023, driven by higher underwriting and investment income, as well as gains in equity markets. Companies are expected to maintain strong capitalisation and may increase share repurchases and dividends in the latter half of 2024 and into 2025 as growth opportunities lessen and investors seek returns on capital.

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