Big four reinsurers face nine-digit losses on Ukraine war

The big four European reinsurers, Munich Re,  Swiss Re, Hannover Re and SCOR, will all likely suffer losses on the war in Ukraine to be measured in the hundreds of millions, but not likely billions, analysts said following an early estimate by  Swiss Re.

“Extrapolating this to other reinsurers, we would estimate high triple digit millions loss for Munich Re, low to mid triple digit millions for Hannover and low triple digit millions for SCOR,” analysts at Deutsche Bank said in a research note to markets.

Comments follow estimates from Swiss Re, issued informally during the company's Investor Day festivities on Thursday (April 7).

Swiss Re CEO Christian Mumenthaler (pictured) had compared the likely insurance sector impact from the Ukraine war to a “mid-sized nat cat event,” possibly on a scale with winter storm Uri, and guessed that Swiss Re would take its typical 10% P&C reinsurance share.

Winter Storm Uri was broadly attributed a price tag at $15 billion, rendering a $0.8 to 1.0 billion price tag for Swiss Re, assuming 50% reinsurance cover of industry losses, Deutsche Bank analysts claimed in their research.

That sum “is perhaps slightly higher than the market might have expected” and “feels like potential pressure” against Swiss Re forecasts for a 10% return on equity in 2022, Deutsche Bank analysts suggested.

Swiss Re stood by its 10% target for 2022, but admitted that “it is getting harder” and “depends on many factors, many uncertainties.”

Swiss Re will likely only book incurred losses in its Q1 report and better estimates for the full claims impact from the war will come later in the year, officials had indicated. “Ultimately, in Q2 and Q3 it will be much clearer.”

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