MS sees solid 2025 but uncertain 2026 for European reinsurers

Hannover Rueck SE

06/12/2024 09:18

** Morgan Stanley sees solid fundamentals for European
reinsurers next year, but it warns pricing in the sector could
start softening in 2026
    ** "Reinsurers have some of the best balance sheets within
the European Insurance sector," it says
     ** The broker notes the average solvency for the group
stood at 265% vs sector avg. 220%, which bodes well for the
ability to manage macro volatility and provide capital return
    ** But hurricanes Helene and Milton have likely changed the
pricing dynamic in 2025, MS says, seeing relatively flat margins
for the sector in the year
    ** Germany's Hannover Rueck  HNRGn.DE  is best positioned
for uncertainty over the longer term, MS says -- ups to
"overweight" from "equal-weight"
    ** It sees room for further re-rating for Scor  SCOR.PA 
saying the French reinsurer meets its strategic targets --
raises to "overweight" from "equal-weight"
    ** MS cuts Munich Re  MUVGn.DE  to "equal-weight" from
"overweight", seeing limited room for positive surprises
   ** It upgrades Swiss Re  SRENH.S  to "equal-weight" from
"underweight", with shares trading above their long-term avg at
peak property catastrophe reinsurance pricing

 (Reporting by Ozan Ergenay)
 ((ozan.ergenay@thomsonreuters.com))