Insurers Gain €1.1bn in H1 as Catastrophe Losses Plummet
The absence of large-scale catastrophes this year has brought a significant windfall to both reinsurers and major European primary insurers. The five leading primary insurers have collectively saved €1.1bn relative to their catastrophe budgets in the first half of the year, improving their combined ratios by one percentage point.
Autonomous, a research arm of AllianceBernstein, has been studying the impact of this year's benign catastrophe environment on the primary insurers. The firm has modelled a scenario where losses in the third quarter reach 40% of normalised annual expectations, adding a further €1.1bn to the sector's surplus.
AXA is projected to gain €0.4bn in the third quarter, slightly ahead of Allianz's €0.35bn advantage. Allianz reported catastrophe losses equivalent to 1.8% of premiums in the first half of the year, compared to its average of 3%. Meanwhile, Aviva has struggled with adverse conditions in Ireland and Canada, resulting in a 1.3% deficit compared to its normalised 4% expectation.
The supportive catastrophe environment has provided an additional buffer for primary insurers, allowing them to meet earnings targets and maintain consensus expectations in the third quarter. This unexpected surplus could help insurers strengthen their financial positions and prepare for potential future challenges.
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