“We achieved all our financial targets in a year that was characterised by geopolitical turbulence and continued economic uncertainty. Improved price adequacy in our property and casualty businesses following strong renewals and our underwriting discipline helped us to manage elevated industry losses from natural catastrophes, ,” said Chief Executive Officer Christian Mumenthaler
FRANKFURT:
Swiss Re, the second largest international reinsurer, said on Friday that net profit for 2023 surged 580%, in line with expectations, as it recovered from a difficult period a year earlier.
The net profit of $3.214 billion for the year compares with a profit of $472 million a year earlier.
Analysts had expected a profit of $3.263 billion, according to a consensus forecast.
The profit marks a recovery from 2022, when the company was absorbing claims from Hurricane Ian in Florida, and as the war in Ukraine, inflation and volatile markets also dampened performance.
The company proposed a 6% increase in its dividend to $6.80 per share.
“We achieved all our financial targets in a year that was characterised by geopolitical turbulence and continued economic uncertainty. Improved price adequacy in our property and casualty businesses following strong renewals and our underwriting discipline helped us to manage elevated industry losses from natural catastrophes, ,” said chief executive officer Christian Mumenthaler.
“In 2024, we continue to put emphasis on underwriting discipline as evidenced in the successful January renewals. Our focus on costs and strengthening proximity to our clients also remains paramount,” he said.
Swiss Re’s Group chief financial officer John Dacey said: “Our businesses are well positioned to benefit from the current market environment, while the higher interest rate environment supports recurring investment income.”
P&C Re delivers solid result
The group’s Property & Casualty Reinsurance (P&C Re),with a combined ratio of 94.8%, reported a net income of $ 1.9 billion for 2023, compared with $ 312 million in the previous year. The solid result was primarily driven by a resilient underwriting performance and disciplined renewals.
Strong margins and positive reserve developments in property and speciality lines helped offset reserve strengthening in the casualty business. In addition, the result was supported by a solid investment performance.
Large natural catastrophe claims amounted to $1.3 billion in 20232, below the full-year budget of $1.7 billion. These claims included the earthquake in Turkey and Syria at the beginning of the year, Hurricane Otis in Mexico in the fourth quarter as well as several storms and consequent flooding in Europe throughout the year.
January 1 P&C Re renewals
P&C Re renewed treaty contracts resulting in $13.1 billion in premium volume on 1 January 2024. This represents a 9% volume increase compared with the business that was up for renewal. Overall, P&C Re achieved a price increase of 9% in this renewal round.
Earlier the reinsurer had said its net income to exceed $3.6 billion for 2024 while announcing new financial targets on its investors day.
The company’s property and casualty reinsurance business is aiming for a combined ratio of less than 87% next year, it said, while the life and reinsurance operations is expected to generate net income of $1.5 billion.
In its corporate solutions business, the tailored insurance operation it offers to big companies, Swiss Re will target a combined ratio of less than 93%, while the group as a whole is aiming for a long-term return on equity of more than 14%.
The changes come as Swiss Re switches its accounting standard from U.S. GAAP to IFRS, a move that will be effective from 2024.
with inputs from agencies