Generali’s Reinsurance Scrutinized Amid Rising European Catastrophe Losses
Generali’s aggregate reinsurance protection is under scrutiny as European catastrophes and weather events take a toll in 2026. Jefferies analysts predict the insurer may need to recover funds from its aggregate reinsurance due to restructuring and increased losses.
The investment bank’s team met with Generali’s management, discussing the rising catastrophe losses in Europe. Generali restructured its aggregate reinsurance for 2026, aiming for better protection against frequent loss events.
Restructuring reinsurance for 2026
Windstorm Kristin, impacting Portugal and Spain in January 2026, caused an estimated €1.727 billion in insurance losses, according to PERILS AG. This event triggered Generali’s per-event reinsurance, leading to reinstatement premiums in its Q2 2026 earnings.
Generali also faced severe weather in July, with convective storms causing €25-30 million in losses and a hail storm in Italy, France, and Germany resulting in approximately €270 million in damages. Wildfires in Spain and France added up to €100 million in estimated losses for the company.
Aggregate reinsurance terms improve
Generali’s per-event reinsurance activates at €300 million in losses, while its renewed aggregate protection starts at €1.2 billion, covering an additional €550 million. The 2026 aggregate reinsurance features a €10 million franchise deductible, an improvement from the previous year.
Despite expecting to reach its €1.05 billion catastrophe budget after July’s events, Generali’s management believes the industry’s total losses from these events could exceed €4 billion. The insurer anticipates its market share of these losses.
Jefferies analysts suggest Generali is likely to reach its aggregate reinsurance retention in 2026, unlike the previous year. With three months remaining and the winter storm season approaching, this seems plausible, especially as Generali’s management disclosed they were already close to their catastrophe budget after July.
The restructuring and improved deductible terms for the aggregate reinsurance become key in this context. Generali’s experience may also indicate that other major European insurers and reinsurers could face higher losses in 2026. The El Niño-fueled autumn and winter could impact other aggregate structures in the reinsurance market.
As the year progresses, the focus remains on how Generali and other insurers work through the challenges posed by these weather events and their impact on reinsurance arrangements.
