European Insurance "Reinsurers: Softer cycle beginning to bite" Hardcastle

Research evidence excerpt

European Insurance "Reinsurers: Softer cycle beginning to bite" Hardcastle

Global Research

21 May 2026ab

European Insurance Equities

Europe including UKReinsurers: Softer cycle beginning to bite

Insurance

Will Hardcastle, CFA

Challenging catalyst path leaves us cautious on European Reinsurers Analyst

We remain cautious on the European Reinsurers, and downgrade Swiss Re to Sell (here). will.hardcastle@ubs.com

Our key takeaways from the Q1 results were; 1. Reinsurance Revenues are under +44-20-7567 9763

increased pressure as pricing challenges cons. growth expectations, 2. Current year Qian Lu

earnings strength is likely to drive even tougher renewals as the year progresses. While Analyst

Munich/Hannover Re have de-rated post Q1 updates, Swiss Re has re-rated. The qian-za.lu@ubs.com

upcoming newsflow journey of; (i). weak mid-year renewals, (ii) entering catastrophe +44-20-7567 4657

season, & (iii) poor sentiment at Monte Carlo event, comes before any further capital Chloe Ryan

distribution positive can be debated towards the end of the year. Associate Analyst

chloe.ryan@ubs.com

UBSe a >$75bn industry loss event needed just to halt price declines +44-20-7567 3505

We estimate it would take a c.$75bn industry loss event to put a stop to price declines Nasib Ahmed, FIA

(what cons. implies), and a >$120bn industry insured loss event (largest ever on record Analyst

Hurricane Katrina $105bn inflation adj.) to drive price increases to a level akin to 24 nasib-za.ahmed@ubs.com

+44-20-7568 8231

months ago. Yet, the El Nino formation is expected to result in a benign hurricane season

Contrary to common thesis, a benign cat year is now a negative in our view

Typically, a benign catastrophe year leads to higher earnings, book value growth &