Swiss Re publishes full-year financial results | Insurance business America
The reinsurer also set its net income target for 2024
reinsurance
By Kenneth Araullo
Swiss Re has reported an increase in its net profit, reaching $3.2 billion for 2023, with the fourth quarter contributing $748 million to that total.
The company also posted a solid return on equity (ROE) of 22.3% over the same period. Given these positive financial results, the Board intends to propose a dividend increase to $6.80 per share. Looking ahead, Swiss Re has set itself a net income of over $3.6 billion for 2024, according to IFRS accounting standards.
The reinsurer’s financial results represent a significant improvement over last year’s figures of $472 million in net income and an ROE of 2.6%. This turnaround, Swiss Re said, was driven by improved underwriting margins and an increase in investment income due to higher interest rates .
Swiss Re’s net premiums earned and fee income also grew 4.4% to $45.0 billion in 2023, compared to $43.1 billion a year earlier. Adjusted for constant exchange rates, this corresponds to an increase of 4.9%.
The company’s investment return increased to 3.4% for the year from 2.0% in 2022, with recurring income yield increasing to 3.6% from 2.6% a year ago, benefiting from the higher interest rate environment. By the fourth quarter, the recurring income yield increased to 3.9% and the reinvestment yield reached 5.0%.
Swiss Re maintained a strong capital position throughout the year, supported by robust earnings and the positive impact of higher interest rates, with the Group Swiss Solvency Test (SST) ratio significantly exceeding its target range of 200-250% as of January 1, 2024.
Swiss Re segment results
Its property and casualty reinsurance (P&C Re) division reported net income of $1.9 billion for 2023, up from $312 million a year earlier, thanks to what the company described as robust underwriting and disciplined renewal contracts. Despite significant events such as the earthquakes in Turkey and Syria, Hurricane Otis in Mexico, and various storms and floods in Europe, the department managed to keep major natural disaster losses at $1.3 billion below the budgeted $1.7 billion to hold US dollars.
P&C Re’s net premiums earned rose 3.9% to $22.9 billion and its combined ratio for the year was 94.8%, meeting its target of less than 95%.
During the January renewal round, P&C Re successfully increased its premium volume by 9% to $13.1 billion, with a 9% price increase and updated loss assumptions due to inflation and model adjustments.
The life and health reinsurance (L&H Re) segment also exceeded its net profit target, reporting $976 million for 2023, up from $416 million last year. This result was due to strategic portfolio management and strong investment performance, despite higher mortality claims in the US, the company said. The segment’s net premiums earned and fee income increased 4.4% to $15.6 billion.
Corporate Solutions continued its strong streak with net income of $678 million in 2023, up from $486 million a year ago, driven by improved portfolio resilience and higher investment income.
Net premiums earned remained stable at $5.5 billion, with an adjusted increase of 7.3% when excluding the sold elipsLife business. The division’s combined combined ratio was 91.7%, exceeding the target of less than 94%.
“Swiss Re can look back on a successful year in 2023. “We achieved all of our financial targets in a year marked by geopolitical turmoil and ongoing economic uncertainty,” said CEO Christian Mumenthaler.
What do you think about this story? Please share your comments below.
Stay up to date with the latest news and events
Join our mailing list, it’s free!
Source link
2024-02-16 14:40:00
www.insurancebusinessmag.com
