This report does not constitute a rating action.

S&P Global Ratings' assessment of an insurer's financial strength encompasses a variety of factors such as competitive position, capital and earnings, risk exposure, and funding structure. Most insurers in EMEA benefit from high credit quality, with 63% of all financial strength ratings being in the 'A' category and 9% in the 'AA' category.

The highest-rated insurers all have competitive position assessments of at least very strong, reflecting their robust operating performance, market-leading positions, solid underwriting capabilities, and pricing power. Earnings diversification is another important aspect of the very strong assessments.

In this report, we take a closer look at the features that the highest-rated insurers in EMEA have in common, as well as those that differentiate them. We base our analysis on a group of primary insurers that we rate in the 'AA' category, namely: Allianz SE, Aviva PLC, AXA, Covea Cooperations, Legal & General Group PLC, Sampo PLC, Talanx AG, and Zurich Insurance Co. Ltd.

EMEA-Based Insurer Ratings Are High On Average

EMEA-based insurers benefit from sound capital buffers and solid underwriting performance and generally have little appetite to increase investment risk. All this provides them with a substantial cushion against potential geopolitical conflicts, which could destabilize the capital markets and undermine insurers' investments, exacerbate claims inflation in property/casualty (P/C) insurance, and mute topline growth in life insurance.

Even a sharp decline in equity markets in 2022, followed by a rapid recovery, did not materially impair EMEA-based insurers' capital positions. In addition, capital adequacy improved in aggregate in 2023 following the application of S&P Global Ratings' new insurer risk-based capital adequacy criteria.

We view the European insurance sector as stable, not least due to its robust capital surplus, which we expect will exceed €100 billion over 2025-2026 (see chart 1). We base this estimate on rated reinsurers' and insurers' (re/insurers') latest capital surplus and our assumption that listed re/insurers' dividend distributions and share buybacks will continue. Capital adequacy is a key rating strength for EMEA-based re/insurers, while the capital surplus provides some protection from investment risks.

Chart 1

As a result, the average rating on EMEA-based insurers is in the 'A' category (see chart 2). Most outlooks are stable and there are more positive than negative outlooks (see chart 3). Moreover, 65% of EMEA-based insurers have capital adequacy at a 99.95% confidence level and above, as per S&P Global Ratings' model, and 67% have exceptional liquidity.

Chart 2

Chart 3

Top-Rated EMEA-Based Insurers Have Very Strong Competitive Position Assessments

One key factor that differentiates EMEA-based insurers that we rate in the 'AA' category from those with lower ratings is our view of their competitive position. All insurers in our 'AA' rating category cohort have a competitive position assessment of at least very strong. They also have a business risk profile assessment of very strong, the second-highest level. That said, every insurer has different strengths and weaknesses, and different sub-scores can result in the same overall rating (see table 1).

Table 1

EMEA-based insurer cohort--Ratings score snapshots
	Allianz	Aviva	AXA	Covea	L&G	Sampo	Talanx	Zurich Insurance
Business risk profile	Very strong	Very strong	Very strong	Very strong	Very strong	Very strong	Very strong	Very strong
Competitive position	Excellent	Very strong	Excellent	Very strong	Very strong	Very strong	Very strong	Excellent
IICRA	Intermediate	Low	Intermediate	Intermediate	Low	Low	Intermediate	Intermediate
Financial risk profile	Excellent	Very strong	Strong	Very strong	Very strong	Very strong	Very strong	Very strong
Capital and earnings	Excellent	Very strong	Strong	Excellent	Very strong	Very strong	Very strong	Very strong
Risk exposure	Moderately low	Moderately low	Moderately low	Moderately high	Moderately low	Moderately low	Moderately low	Moderately low
Selected anchor	aa	aa-	aa-	aa-	aa-	aa-	aa-	aa
Governance	Neutral	Neutral	Neutral	Neutral	Neutral	Neutral	Neutral	Neutral
Liquidity	Exceptional	Exceptional	Exceptional	Exceptional	Exceptional	Exceptional	Exceptional	Exceptional
Comparable ratings analysis	0	0	0	0	0	0	0	0
Financial strength rating	AA	AA-	AA-	AA-	AA-	AA-	AA-	AA
Outlook	Stable	Stable	Positive	Negative	Stable	Stable	Stable	Stable
Data as of June 5, 2025. IICRA--Insurance Industry And Country Risk Assessment. Source: S&P Global Ratings.

In analyzing insurers' competitive positions, we assess their competitive advantage, business diversity, and profitability.

Competitive advantage 

The insurers in our cohort generally have leading positions in their respective markets, with significant scale, brand awareness, and usually pricing power. We consider these factors holistically when determining an insurer's overall competitive position. Therefore factors that are significant strengths could have a material impact on our overall view of the insurer's competitive position.

Business diversity 

When assessing an insurer's business diversity, we typically consider:

• The number of material lines of business or business segments, both insurance and noninsurance;
• Geographical footprint; and
• The potential correlation or interdependency between the lines of business or business segments.

The insurers in our cohort all benefit from strong diversification by lines of business, such as life, P/C, and health. Some also undertake retail and commercial business, operate in various regions, and generate earnings from noninsurance-related activities, such as fee business or asset management (see company profiles below).

Profitability 

In our view, profitability is a likely consequence of a healthy competitive position. We therefore generally expect the profitability metrics of an insurer with a stronger overall competitive position to be consistently higher and more stable than those of its competitors over multiple years. We also take a favorable view of a well-defined process for allocating capital to different products, lines of business, and risk factors that we believe will lead to sustainable profitability.

Our cohort demonstrated a strong operating performance in 2024, with an average ROE of 13.4% and a combined ratio of 92%. Moreover, in the past five years, the average ROE was 11.2% and the combined ratio was 94%, supporting the cohort's strong and stable operating performance (see table 2). Some insurers' combined ratios benefitted from the switch to International Financial Reporting Standard (IFRS) 17 in 2023. This is because under IFRS 17, insurers must adjust the value of future cash flows to reflect their present value, and this can lower the present value of future claims.

Table 2

EMEA-based insurer cohort--Return on equity and combined ratio performance
(%)	2020	2021	2022	2023	2024
Net combined ratio	96.6	94.5	93.8	92.4	92.0
Return on shareholders' equity	8.1	12.1	9.8	12.8	13.4
Simple average based on the cohort: Allianz SE, Aviva PLC, AXA, Covea Cooperations, Legal & General Group PLC, Sampo PLC, Talanx AG, and Zurich Insurance Co. Ltd. Source: S&P Global Ratings.

Competitive Position Summaries

Allianz (AA/Stable) 

As a leading global multi-line insurer, Allianz benefits from broad international operations with strong positions in key European insurance markets, including Germany, France, and Italy, as well as in the U.S. life insurance market. Allianz also continues to gradually expand its footprint in Asia-Pacific, with a focus on more developed countries in the region. Significant business and product diversification through global lines of business further support Allianz's position. In 2024, Allianz Trade, a leading global trade credit insurer, and Allianz Commercial, a large global commercial insurance underwriter, together contributed around €1.5 billion of total operating profit of €16 billion.

Allianz is one of the best-known brands in the global insurance sector. In 2024, Allianz's insurance revenue grew by a strong 7% to almost €97.7 billion, supported by life and non-life insurance and asset management. Allianz's strong business and product diversification--combined with underwriting discipline and a strong focus on customer excellence--allowed it to sustain robust underwriting margins in both life and non-life insurance in 2024. At the same time, Allianz's investment results continue to gradually improve.

Allianz's IFRS 17 net income rose by almost 17% to €10.5 billion in 2024, and its ROE increased to 18.2%. Allianz maintained its resilient performance in non-life insurance, reporting a combined ratio of 93.4%. In life insurance, Allianz reported a new business margin of 5.7% in 2024 and strong growth in the contractual service margin of 6.1%, with a total gross contractual service margin of €55.7 billion.

Stable and growing fee income from large global asset management operations--mainly PIMCO, a top-10 global asset manager, and AGI--complemented Allianz's earnings from its insurance operations. The combined asset management operations contributed €3.2 billion of Allianz's operating profit in 2024. For the overall group, we forecast an increase of about 4%-8% in insurance revenues per year over 2025-2027, leading to robust net income in excess of €8 billion and ROE of 13%-18%.

Aviva (AA-/Stable) 

Aviva's leading positions and strong brand recognition support its robust performance. Aviva is a diversified insurer and one of the leaders in its three core markets of the U.K., Ireland, and Canada. Serving just over 19 million customers, Aviva offers general, life, and health insurance, along with wealth and retirement products. Its asset management arm, Aviva Investors, is smaller than the asset management operations of some of its peers and mainly serves Aviva's needs. However, we consider that it is likely to grow in scale and importance.

In 2024, Aviva's insurance revenue grew by 12% year on year to £20 billion and its gross operating profit increased to £1.8 billion from £1.5 billion in 2023. Aviva's capital-light business contributed 56% of group operating profit, demonstrating the group's progress with its strategy. The general insurance segment achieved a discounted net combined ratio of 92.2%, aided by a favorable environment for premium rates and despite increased catastrophe losses in Canada.

Other 2024 highlights included Aviva's completion of its acquisition of AIG's U.K. protection business and record growth in the bulk annuity purchase business, leading to operating profit of £1.1 billion in Aviva's insurance, wealth, and retirement segment. However, IFRS 17 net income fell to £705 million in 2024 from £1.1 billion in 2023, largely due to investment variances relating to an increase in interest rates in the year. Aviva has agreed to acquire Direct Line Group (DLG) for £3.7 billion, comprising 49% in cash and 51% in new Aviva shares. If DLG shareholders approve the transaction, we anticipate that it will complete by mid-2025, with a three-year transition period.

AXA (AA-/Positive) 

Our positive view of AXA's profitability also takes account of the resiliency of its profit-generating capacity thanks to its very wide geographical and business diversification. AXA has narrowed its geographical footprint in recent years and now operates mostly in countries where it is one of the top five insurers. These countries include France, Switzerland, Belgium, Germany, Spain, Italy, the U.K., Ireland, Mexico, and Hong Kong. AXA is also a leader in underwriting large corporate commercial lines through AXA XL.

AXA's net income of €7.9 billion after minority interests in 2024 was in line with its expectations. AXA demonstrated strong revenue growth of 7% last year, with the P/C, life, and health businesses all making positive contributions. The main driver of profit growth was the P/C business, where the combined (loss and expense) ratio improved to 91% from 93% the previous year, thanks to significant tariff increases in motor insurance and lower natural catastrophe costs.

Despite relatively high shareholder remuneration of 75% of underlying net income, we believe that AXA has the capacity to strengthen its capital adequacy thanks to its capital-light growth strategy and retained earnings. The negative outlook on our 'AA-' sovereign credit rating on France has no impact on our ratings on AXA. This is because the group's exposure to French assets totals less than 20% of its general account investments. Moreover, we forecast that AXA would not deplete its regulatory capital base of €55.9 billion as of year-end 2024 in a hypothetical sovereign stress scenario, and we believe that regulatory intervention is unlikely.

Covéa (AA-/Negative) 

Covéa's well-established competitive position will enable it to continue generating solid technical results. Covéa has a leading position in the French P/C insurance market, including motor and home insurance and legal protection. The group takes advantage of a comprehensive and multichannel distribution network and has three well-known brands, MMA, GMF, and MAAF.

We believe that PartnerRe, which Covéa acquired in 2022, enhances Covéa's reputation and diversifies its geographical footprint and business lines. Furthermore, this acquisition has strengthened the combined group's ability to generate solid earnings over the cycle, thereby mitigating risks arising from Covéa's concentrated exposure to the French market. In 2024, 60% of Covéa's net income came from PartnerRe's contribution.

Legal & General Group (L&G; AA-/Stable) 

We think that L&G will demonstrate its competitive strength by delivering an operating performance above the market average. We expect that L&G will maintain its diversified product range and strong market position in pensions, protection, and asset management, benefiting from its renowned brand and reputation in both retail and institutional markets. L&G has demonstrated these strengths with its robust earnings in recent years despite frequent economic headwinds. That said, compared to some of its 'AA-' rated peers, L&G has much narrower geographical diversification, which explains our choice of the lower of two anchors in our methodology.

Sampo (AA-/Stable) 

Sampo benefits from its well-known brand and good reputation. It is the only insurer in Europe that holds top positions in the Danish, Finnish, Swedish, and Norwegian P/C insurance markets. It also has a presence in the U.K. In our view, however, Sampo's product diversification shrank somewhat after the demerger of Mandatum.

On June 17, 2024, Sampo announced an exchange offer for the outstanding shares of Topdanmark, and on Sept. 10, 2024, it announced an acceptance rate of 92.6%. The exchange offer is in line with Sampo's strategy to strengthen its position as a leading P/C insurer in the Nordics. It will also result in cost and earnings synergies, while increasing Sampo's scale in Denmark.

Despite higher weather-related claims in the first six months of 2024, Sampo reported a 13% increase in net income to €653 million. This was the result of an improvement in Sampo's net financial results, with a noticeable increase in underlying earnings from the U.K. due to higher revenue from rates than claims inflation. The reported combined ratio increased to 85.8% in the first six months of 2024 from 84.6% at year-end 2023. We forecast an increase of about 5.0% in insurance revenues per year over 2024-2026, leading to net income of more than €1.2 billion and ROE of more than 12.0%.

Talanx Primary Group (TPG; AA-/Stable) 

TPG has strengthened its diversification and now benefits from a well-balanced portfolio. TPG generates revenue and earnings from a broad range of business lines and regions in its three segments:

• Retail International, which contributed about 40% of earnings in 2024;
• Corporate & Specialty (about 45%); and
• Retail Germany (about 15%).

TPG has substantially enhanced its earnings generation and diversification through successful expansion in Latin America and strong, profitable growth in its corporate and specialty business. TPG's wide geographical diversification supports its growth ambitions. In Retail International, the acquisition and successful integration of Liberty Mutual companies in Latin America in 2023 and 2024 have enhanced TPG's market position. They have also improved the balance of TPG's retail international portfolio between Europe and Latin America, with each region now contributing 50% to revenue, compared with approximately 75% from Europe and 25% from Latin America in 2020.

In the Corporate & Specialty segment, TPG has a sound global presence with top positions in various large markets. TPG's net income rose by 25% in 2024 to reach €1.98 billion, up from €1.58 billion in 2023. A solid P/C combined (loss and expense) ratio supported this performance. The P/C combined ratio improved to 91.6% in 2024 from 93.4% the previous year, despite elevated large natural catastrophe and man-made losses. This improvement is mainly due to disciplined underwriting controls, strategic repricing in the corporate and specialty segment, and premium adjustments linked to inflation.

We anticipate that TPG's robust underwriting standards, cost discipline, and profitable growth will support its profitability in the coming years, with net income exceeding €2.1 billion over 2025-2026. In our view, TPG can sustain ROE above 12%, assuming that natural catastrophe and major man-made events will not surpass its loss budget. The improving performance of the primary operations has reduced TPG's dependance on earnings from its subsidiary Hannover Re to reach its net income targets.

Zurich Insurance (Zurich; AA/Stable) 

Zurich is a multi-line insurer with a well-balanced split between life and non-life insurance, complemented by steady fee income from subsidiary Farmers Group Inc. This allows Zurich to maintain a strong and resilient operating performance that is among the best in its global multiline insurance peer group. Zurich has market-leading positions in the U.S., Europe (mainly Switzerland, the U.K., and Germany), and Australia (life insurance), and is expanding its operations in Latin America. Zurich is also one of the leading commercial insurance writers globally.

Favorable revenue growth rates have helped Zurich report strong business volumes. Zurich's reported combined ratio dropped slightly to 94.2% in 2024 from 94.5% in 2023. The small decrease was due to a decline in the attritional loss ratio, which an increase in commission expenses partly offset.

Related Criteria

• Insurer Risk-Based Capital Adequacy--Methodology And Assumptions, Nov. 15, 2023
• Insurers Rating Methodology, July 1, 2019

Related Research

• Solid Earnings Momentum For Global Multiline Insurers Continues, May 23, 2025
• EMEA Insurers Ratings List: Financial Strength Ratings And Scores, April 22, 2025
• Tariffs Put European Re/Insurance Ratings To The Test, April 9, 2025
• Credit FAQ: How We Use IFRS 17 Accounting Metrics In Our Analysis Of Insurers And Re-Insurers, March 18, 2025
• AXA Group Outlook Revised To Positive On Expected Capital Strengthening And Profitability Growth; 'AA-' Ratings Affirmed, Feb. 25, 2025
• Talanx Primary Insurance Group Upgraded To 'AA-' On Enhanced Diversification And Earnings Resilience; Outlook Stable, Feb. 5, 2025
• A Prolonged Financial Market Downturn Would Erode Insurers' Surplus Capital Across EMEA, Nov. 25, 2024
• European Insurance Outlook 2025: Holding Up Well, Nov. 21, 2024

Primary Contacts:	Johannes Bender, Frankfurt 49-693-399-9196; johannes.bender@spglobal.com
	Jean Paul Huby Klein, Frankfurt 49-693-399-9198; jeanpaul.hubyklein@spglobal.com
Secondary Contacts:	Volker Kudszus, Frankfurt 49-693-399-9192; volker.kudszus@spglobal.com
	Charles-Marie Delpuech, London 44-20-7176-7967; charles-marie.delpuech@spglobal.com
	Simon Ashworth, London 44-20-7176-7243; simon.ashworth@spglobal.com
Research Contributor:	Rahul Iyer, CRISIL Global Analytical Center, an S&P Global Ratings affiliate, Mumbai ;