European shares rose on Monday, led by insurers as the downgrade of Hurricane Irma in the United States raised the prospect that costs for the industry may be lower than initially feared.

Europe's insurance index was the biggest sectoral gainer, up 2 per cent and set for its best day in more than four months after the estimated insured loss in the US resulting from Irma was cut to $20-40 billion.

Insured losses

“Insured losses (overall) are now expected to be less than many feared,” Credit Suisse analysts said.

Their gains added fuel to a broad-based rally, helping the pan-European STOXX 600 rise 0.6 per cent.

Irma, which hit Florida early on Sunday, came swiftly after Hurricane Harvey, whose costs for the industry have been estimated at $20-$30 billion.

Among top gainers were top world reinsurers Munich Re, Swiss Re and Hannover Re , all up over 4 per cent, while Britain's Beazley added 6 per cent.

Analysts at Baader Helvea have upgraded Hannover Re to hold from sell, saying that following the stock's recent heavy losses the market had already priced in an extremely severe scenario.

Europe's insurance index has underperformed the broader market so far in 2017 and is still down 4.5 per cent from its year high, hit in early August.

Elsewhere, pharma heavyweight AstraZeneca rose 2.3 per cent after two of its drugs tackling lung cancer delivered impressive clinical results on Saturday.

That helped the British group offset a big clinical trial setback in the disease in July that sent its shares down more than 15 per cent, its biggest daily loss ever.

In the same sector, however, Denmark's Lundbeck slumped 11 per cent, the leading faller in Europe, after the resignation of CEO Křre Schultz.