European insurance companies posted strong results in 1H24, driven by favourable interest rates and pricing cycles, despite varied national trends, according to Fitch Ratings.
Most insurers are on track for a solid full-year performance, with interest rate cuts starting and insurance price increases likely having peaked.
Underwriting margins in the life insurance sector have benefited from higher interest rates, while the non-life sector saw gains from elevated pricing across Europe. Increased investment returns have also supported earnings.
The strong results in the first half of 2024 have helped insurers maintain or even strengthen their capital positions.
However, Fitch’s country-specific analysis and recent market trends highlight differences in local market dynamics. UK life insurers, and to a lesser extent Dutch insurers, are benefiting from profitable pension risk transfers. In Italy and France, flows to traditional savings products are improving as alternative, non-insurance options have become less attractive, but flows from single premium business remain weak in Germany.
In the non-life sector, premiums have generally risen to offset higher claims inflation and reinsurance costs. Price increases in Italy and the UK, where personal lines adjustments began earlier, were more moderate than in Germany.
Natural catastrophe losses also varied by country, with floods causing significant losses for primary insurers, particularly in Germany. This underscores how higher reinsurance retention since 2023 has contributed to earnings volatility.
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