Analyst actions from American institution JPMorgan created negative pressure on the shares of Munich Re and Hannover Rück during Friday trading in Frankfurt. Both reinsurance equities recorded declines of approximately 4 percent within a weak broader market environment, placing them among the poorest performers inside the Dax index. This downward movement interrupted the recent upward surge enjoyed by both industry peers. Starting from early October, the equities had temporarily gained roughly a quarter in value.
Reinsurance providers had traversed the most robust epoch across the preceding thirty years concerning return on equity metrics, according to notes authored by JPMorgan analyst Kamran Hossain. The subsequent trajectory appears more arduous. The specialist anticipates ongoing pricing pressures to materialize during the upcoming renewal period scheduled for 2027. Following their substantial appreciation, the overall financial return offered by reinsurers no longer appears particularly compelling when evaluated against primary insurance competitors.
The expert maintains a distinctly cautious stance regarding Hannover Rück, characterizing the valuation as excessive while shifting the share recommendation from Neutral down to Underweight, though the price target of 270 euros remains unchanged. During the preceding day, unexpected profit gains reported across the initial nine-month period by Swiss peer Swiss Re had propelled Hannover Rück shares upward to reach a peak valuation level at 309.20 euros. Heading into the weekend session, those same equities surrendered 4 percent to settle at 294.20 euros.
Conversely, Hossain regards the valuation attached to Munich Re as appropriate, prompting a downgrade for those instruments from Overweight to Neutral while maintaining the price target at 590 euros. On Friday, the shares experienced a 3.9 percent contraction, landing at 571.40 euros. The Munich-based enterprise likewise drew positive momentum from Swiss Re on the prior day, carrying its price close to its maximum historical threshold. Meanwhile, the analyst maintained an Underweight rating on the Swiss entity, whose shares retreated by 3.9 percent in Zurich.
Throughout the current calendar year up to this point, the equity value of Swiss Re advanced by more than 15 percent, outperforming the gains recorded by German market participants Hannover Rück at plus 11 percent and Munich Re at roughly 2 percent. Evaluated via market capitalization figures, the Swiss enterprise stands at a valuation equivalent to nearly 50 billion euros, positioning it as the secondary player among major European reinsurers ahead of Hannover Rück at 36 billion euros, yet trailing behind Munich Re at 75 billion euros.
