Generali’s aggregate reinsurance in focus as European cats and weather bite in 2026

Analysts at investment bank Jefferies have brought insurer Generali’s aggregate reinsurance protection into focus, saying that losses from catastrophes and weather events in Europe could drive the insurer to make reinsurance recoveries from its aggregate protection this year, given the restructuring of the coverage for 2026.

Jefferies analyst team met with Generali’s management recently and the run-rate of catastrophe losses in Europe was highlighted.

Generali had restructured its aggregate reinsurance arrangement for the 2026 calendar year, to provide greater protection against frequency loss events.

Recall that, Windstorm Kristin had affected Portugal and Spain in late January 2026, an event that catastrophe data aggregator PERILS AG had estimated under its EXTENDED loss quantification methodology as a EUR 1.727 billion insurance industry loss event.

Insurer Generali had previously reported that windstorm Kristin had resulted in reinstatement premiums being booked in its second-quarter 2026 earnings, after the loss event had triggered its per-event reinsurance protection.

Generali had also disclosed after the half-year that severe weather events in July had impacted the insurer as well, with severe convective storms expected to result in EUR 25-30 million of losses and a hail storm that affected parts of Italy, France and Germany likely to be a larger loss of around EUR 270 million, it appears.

Generali’s management team had at the time also highlighted severe wildfires in Spain and France, which they estimated at up to EUR 100 million for the company, while saying that the aggregation of catastrophe loss events seen in 2026 had taken them close to their budget for the year.

Generali’s per-event reinsurance kicks in at EUR 300 million of losses, while its renewed aggregate protection attaches at EUR 1.2 billion of losses, covering EUR 550 million beyond that.

The aggregate reinsurance has only a EUR 10 million franchise deductible for 2026, which is lower than the prior year and seen as a significant improvement to the terms.

While the insurer expected to get close to its cat budget after July’s events, which stands at EUR 1.05 billion, Generali’s management team noted after the half-year that it sees the July loss events as potentially costing the insurance industry more than EUR 4 billion, so expected to take its market share in losses from those.

The Jefferies analyst team came away from its meeting with Generali’s management saying, given the loss run-rate in Europe from weather and catastrophes this year, “It seems likely that Generali will hit the aggregate reinsurance retention (unlike last year).”

Which suggests that Generali could make recoveries under its aggregate reinsurance in 2026 and with three months still to run and the winter storm season set to begin, seems possible. Especially given the management team of the insurer disclosed it was already close to its catastrophe budget, although that does sit lower than the aggregate retention, after July.

Which makes the restructuring undertaken and the lower franchise deductible secured after the renewal negotiations for the aggregate reinsurance all the more important for Generali.

Of course, Generali’s experience also means other major insurers and reinsurers operating across Europe could be seeing higher loss experience in 2026 as well. 2025 had been more benign, but with an El Nino fuelled autumn and winter ahead, this activity could have implications for other aggregate structures in the reinsurance market as well.