Munich Re and Swiss Re occupy strongest market positions

Hannover Re, Munich Re, SCOR and Swiss Re, have strong market positions with financial strength underpinned by very strong capitalisation, according to a peer review of the four major European reinsurers by Fitch Ratings.

These are the four largest companies globally in reinsurance premium terms, and their size and the scale of their reinsurance operations influences their ratings.

Fitch found that Munich Re and Swiss Re in particular were considered to occupy the strongest market positions.

Hannover and SCOR by comparison have notably smaller absolute scale and more modest market shares, especially within major reinsurance classes, although both are large reinsurers within the global sector.

The financial strength of all of the companies was driven a by a demonstration of good stability of capitalisation in recent years.

Fitch's risk-based Prism FBM assessment is either 'very strong' or extremely strong' and the regulatory-assessed solvency coverage for each company is consistent with Fitch's assessment.

Operating under Solvency II since the start of 2016, the solvency coverage ratio of Hannover Re, Munich Re and SCOR sits within or above the target range set by each company - levels they consider to be optimal for their businesses.

According to Fitch, the financial performance and earnings is also viewed as a highly influential rating factor although the scores exhibit a greater degree of variation across the four companies.

A differing product mix was the key driver in score variability, with Hannover Re and SCOR operating more similar, lower-risk, less catastrophe-exposed, business profiles than Munich Re or Swiss Re.