Hit by an estimated combined claims of USD 4.7 billion from natural catastrophes, Swiss Re’s net income declined to USD 331 million in 2017 as compared to $3.56 billion in 2016, .
Gross premiums written by the reinsurer during the reporting year shrank to $34.78 billion from $35.62 billion over the period.
The combined ratio of the second largest reinsurer during 2017 increased to 111.5%, reflecting the impact from the significant natural catastrophes. P&C Re continued to experience positive prior-year development in 2017. Amid a continued challenging market, Swiss Re maintained its strict disciplined underwriting approach, ensuring it receives adequate prices for the protection it provides. This active reduction in capacity resulted in an 8.8% decline in gross premiums written to USD 16.5 billion in 2017
The result includes estimated insurance claims, net of retrocession and before tax, of USD 4.7 billion from large natural catastrophes, such as Cyclone Debbie in Australia, Atlantic hurricanes Harvey, Irma and Maria, the Mexican earthquakes, and the wildfires in California.The result reflects a USD 93 million benefit from the US tax reforms.P&C Re
Estimated combined claims of USD 3.7 billion from 2017’s large natural catastrophes led to a strong decline in P&C Re’s results. The reinsurer's both Property & Casualty Reinsurance (P&C Re) and Corporate Solutions results were significantly affected by these events. P&C Re posted a full-year net loss of USD 413 million in 2017 after a net income of $2.10 billion in 2016. Corporate Solutions incurred a net loss of USD 741 million and the annualised ROE was –3.5%.
Group Chief Executive Officer, Christian Mumenthaler, said: “2017 was clearly a challenging year for the industry – and Swiss Re. However, we believe the outlook for our industry is now more positive than it has been during the last four years. Changes in the market environment, such as adjusting property and casualty price levels and increases in interest rates, are expected to be beneficial for our business. In addition, the catastrophes are a reminder of the relevance of large global re/insurers and their role in tackling the large worldwide insurance protection gap. It visibly shows that the need for insurance is increasing due to developments such as population growth and the concentration of assets in catastrophe-prone regions.”
2017 dominated by natural catastrophes After Cyclone Debbie in March, hurricanes Harvey, Irma, and Maria and the Mexican earthquakes caused considerable damage during the third quarter of 2017. During the last quarter of the year, wildfires in California resulted in additional estimated insurance claims for Swiss Re of USD 0.4 billion.
Improved outlook for P&C Re following January 2018 treaty renewals
Swiss Re renewed USD 8.1 billion compared to the USD 7.5 billion premium volume up for renewal on 1 January 2018. This represents an increase of 8 per cent, driven by higher rates across all major lines of business and regions and new large transactions. Prices increased by 2%. Improvements were most pronounced in the loss-affected property lines and were more moderate in other lines. Risk-adjusted price quality increased to 103 per cent . The majority of the loss-affected US property business will be up for renewal later in the year.