US interest rate increases could have a positive impact on European reinsurers – Hannover Re, Munich Re and Swiss Re in focus

US interest rate increases could have a positive impact on European reinsurers – Hannover Re, Munich Re and Swiss Re in focus

Insurer stocks performed positively on Wednesday, supported by expectations of continued high interest rates ahead of the US Federal Reserve's interest rate decision and an industry study by US bank JPMorgan. The focus is particularly on reinsurers such as Munich Re, Hannover Re and Swiss Re.

The European insurer index was the biggest winner in the market-wide Stoxx Europe 600 and continued the recovery of the past few days. A key trend line has been broken. Hannover Re and Munich Re also recorded strong price increases in the Dax.

Index Radar experts believe that the US economy's high growth and tight labor market suggest that the Fed will not rule out further interest rate hikes. The Dekabank experts remind that the Fed members have promised a further interest rate increase by the end of the year. The last opportunity for this would be the meeting on December 13th.

JPMorgan analyst Kamran Hossain reiterated his “Overweight” recommendations on Hannover Re, Munich Re and Swiss Re. He predicts that the strong price development of European reinsurers will continue, as they implemented significant price increases in 2023 and this development is expected to continue in 2024.

This information from the article suggests that current developments in the insurance market are influenced by various factors. The expectation of continued high interest rates and the positive assessment of an analyst can have a positive effect on the prices of insurance companies. If the Fed does indeed raise interest rates further, this could result in companies being able to charge higher premiums. This would increase their profits and increase their growth potential.

According to a report from www.deraktionaer.de