European Reinsurance: Deja Vu heading into Q2 results - Moving Swiss Re to UW and placing Hannover Re on Negative Catalyst Watch

Research evidence excerpt

European Reinsurance: Deja Vu heading into Q2 results - Moving Swiss Re to UW and placing Hannover Re on Negative Catalyst Watch

g@jpmorgan.com

2026 mean that it is unlikely that we see a bottom soon. Actual loss experience

Catalyst Watch is our short-term conviction rather than perceived losses has been the main driver of the reinsurance cycle

indicator for our coverage universe. It is an in the last 20 years, and therefore with 2026 shaping up to be another very

optional indicator our research analysts strong year, we would expect there to be material pressure on reinsurance

can apply to a stock in their coverage into pricing again in 2027. Markets tend to change when profitability is marginal,

a specific event in order to articulate short- with losses pushing companies into making underwriting losses and 2026 so

far shows no sign that the pricing environment will change. term positivity or caution based on near-

term fundamentals. As such, it can differ

• European reinsurance has been on a tumultuous journey in 2026. To say from the analysts’ published ratings, which

it has been a volatile year for the European reinsurers would probably be an

are sector relative and longer term in

understatement. The shares began the year poorly as headlines from the

nature.

reinsurance renewals pointed to the sharpest decline in pricing since the late

1990s, and the stocks remained in the doldrums through the FY earnings

season. As the market looked towards more defensive names, reinsurers did

reasonably well in April ahead of the Q1 results before the majority of the

names had negative reactions to their results with headline revenues weaker

than expectations in most circumstances.

• Not enough for now to reward the market for the golden period for

reinsurance.