European insurers’ H1-24 earnings review

European insurers delivered better than expected results in H1-24, supported by a resilient profitability in P&C segment and a good recovery in the life segment. As interest rates are decreasing, the gain from IFRS 17 discounting is reducing while the cost of unwind is increasing. Hence, insurers still need to increase their investment income to face higher finance expenses generated by the unwind of discounting and thus, support their investment results. Hannover Re, Munich Re, and Swiss Re all reported a strong increase in their earnings with Munich Re reporting the most significant increase in their results. This reflected stronger underwriting results, thanks to high reinsurance prices and below-budget large Nat Cat losses. In France, net inflows strongly recovered in H1-24 with a total of around €16bn, compared to €4.1bn in H1-23 . This was mainly driven by net inflows on UL contracts of+€19.7bn that largely offset the net outflows on traditional products (-€3.7bn). In Italy, net inflows improved by more than €2bn but remain in negative territory . Outflows are explained by higher redemptions on UL contracts that posted €6.6bn of negative net inflows for the first half of the year. Solvency position remains strong for most of European insurers, with a moderate sensitivity to interest rates movements.