Swiss Re reports challenging reinsurance renewals, but broadly stable T&Cs

Global reinsurance giant Swiss Re has reported this morning that the reinsurance renewal environment is challenging but said it is remaining disciplined. While premiums declined in natural catastrophe underwriting due to falling prices, the company cited broadly stable terms and conditions.

Swiss Re reported group-wide net income of $2.8 billion for the first-half which beats analyst consensus slightly, while in property and casualty reinsurance net income came out at $1.4 billion on the back of consensus beating combined ratio of 76.7%.

In what it termed challenging reinsurance renewals, the company said it remained disciplined and focused on cycle management and portfolio quality, while nominal price decreases at June and July came out at 1.2%.

Notably though, natural catastrophe reinsurance is clearly the area softening the most, where Swiss Re reported a 9% reduction in premium volumes.

That is the result of “nominal price declines in a challenging market” in natural catastrophe reinsurance underwriting, Swiss Re explained.

But the reinsurance giant also importantly highlighted that “underwriting discipline was broadly maintained on terms and structures,” while T&Cs were seen as “broadly stable.”

Swiss Re’s Group Chief Executive Officer Andreas Berger commented on the results, “Swiss Re delivered a strong result for the first half of 2026 while supporting our clients with more than USD 17 billion in claims payments. This demonstrates the strength of our diversified Group, with each Business Unit contributing to the resilience of our earnings. P&C Re continues to focus on disciplined underwriting and active cycle management; L&H Re provides important earnings stability through its large in-force portfolio; and Corporate Solutions is selectively expanding in strategic growth markets. We also continue to improve efficiency across Swiss Re and are announcing a more ambitious cost reduction target.”

Group Chief Financial Officer Anders Malmström added, “Each Business Unit delivered increased net income in the first half. Our P&C businesses achieved strong underwriting results, supported by low large natural catastrophe experience, while L&H Re’s performance reflects healthy underwriting margins and favourable US mortality experience. A solid investment result in a highly volatile market further underpinned the resilience of our earnings. We are also making good progress on the USD 1.5 billion share buyback which we announced in February, having completed approximately 60% through the end of July.”

Swiss Re said that its first-half net income of $2.8 billion puts it well on track towards its $4.5 billion full-year target for 2026.

Return-on-equity reached 22.7% for the half-year, only running slightly behind the prior year’s 23%.

A low large natural catastrophe experience in H1 2026 has supported the results, with only $169 million of nat cat and $129 million of man-made losses, while the insurance service result rose for H1 to $3.5 billion, much stronger than H1 2025’s $3 billion.

Insurance revenue fell slightly driven by P&C revenue declines, likely a soft market effect, dropping slightly to $20.3 billion for H1 2026, compared to $20.9 billion for H1 2025.

New business contractual service margin was impacted by “continued challenging market conditions impacting P&C Re renewals,” as well as a lower contribution from life and health, falling to $2.1 billion for H1 2026, down from $3.1 billion for the prior year.

At the P&C reinsurance renewals, Swiss Re’s overall premium volumes increased by 11% at June and July, as the company found new opportunities for growth in certain business lines, particularly property proportional and specialty lines.

While the nominal price decline was -1.2% at the June and July renewal seasons, Swiss Re noted a +4.2% rise in loss assumptions, driving a -5.3% net price change on the renewal book. Year-to-date, the net price change on renewals in 2026 is now running at -4.6%.

Premium volumes on natural catastrophe business are -9% down, as Swiss Re employed underwriting discipline in a challenging market where price declines impact underwritten premium amounts.

Non-cat property business volumes are up by 8% year-to-date, while specialty is flat and casualty also up 3%, for a total premium volume change of +1% across all renewal business, despite the challenging environment.

Once again, Swiss Re highlighted lower external retrocession again in its half-year results, as the trend of retaining more of its business continues.

Swiss Re’s half-year shows the effects of the challenging, competitive and softened marketplace, but beating net income also shows the profitability of a large, globally diversified re/insurance player can deliver through market cycles.

CEO Andreas Berger commented on the outlook saying, “Strong earnings delivery in the first half of the year puts us well on track towards our 2026 financial targets, while we remain vigilant as we approach the peak of the hurricane season. Looking beyond the current year, we see demand for re/insurance and risk expertise continuing to grow in a rapidly changing world. By investing in data, technology and artificial intelligence, we are building the capabilities that will enable us to better capture this growing demand, help our clients navigate an increasingly complex risk landscape and create long-term value for our shareholders.”