Swiss Re Insurance-Linked Fund Management

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Swiss Re writes 5% more premiums, at 19% higher prices in April renewal


Global reinsurance giant Swiss Re has continued to expand its business in the current hard market environment, reporting today that it has underwritten 5% more business in volume terms, at 19% higher prices on average, during the April renewal season.

swiss-re-logo-buildingSwiss Re’s property and casualty (P&C) reinsurance unit renewed contracts with US $2.6 billion in treaty premium volume on April 1st 2023.

That equates to a 5% increase in premiums over the prior year period, as Swiss Re continues to expand into the improved reinsurance market fundamentals.

Across this April renewal book, Swiss Re’s P&C reinsurance unit achieved a price increase of 19%, the company explained.

As with the January renewals, Swiss Re said that the price increases have more than offset higher loss assumptions of 13% from the enlarged P&C renewal book, even when taking a prudent view on economic inflation and loss model updates.

Swiss Re’s P&C Re unit reported improved net income of US $369 million for the first quarter of 2023, up on the US $85 million reported for the same period in 2022.

This is despite large natural catastrophe claims that occurred in the quarter, Swiss Re said, the largest of which was the earthquake in Turkey and Syria.

Swiss Re said that it has booked US $426 million in net claims within its P&C Re unit for the earthquakes.

The reinsurer has based this loss reserve on a market loss estimate of US $5.3 billion, which is about the highest industry estimate for this quake reported by any company so far.

CFO John Dacey said this is the biggest insured earthquake loss experienced in the region ever.

It also shows the significant market share Swiss Re has of the quake loss, at more than 8% of the industry impact.

Other major losses Swiss Re suffered in the period included Cyclone Gabrielle and flooding in New Zealand.

In total, Swiss Re’s Q1 catastrophe losses are estimated at US $597 million, CFO John Dacey explained during a call this morning.

The Swiss Re P&C Re unit reported a combined ratio of 97.2% for the first quarter of 2023, down on the prior years 99.3%.

As a result, Swiss Re said that its P&C Re unit confirms a full-year target of achieving a combined ratio below 95%, with the majority of its natural catastrophe premiums earned during the second half of the year.

Across the entire Swiss Re business, net premiums earned were up by 4% for the quarter and net income reached US $643 million, much better than the -US $248 million loss of the prior year period.

The company said that, “improved profitability in all main businesses absorbed large natural catastrophe losses and seasonally higher mortality in winter months.”

Swiss Re’s Group Chief Executive Officer Christian Mumenthaler commented, “The first-quarter results demonstrate the resilience of all our main businesses, supported by adequate pricing, higher investment returns and cost discipline.”

Swiss Re’s Group Chief Financial Officer John Dacey added, “The return on investments of 2.8% that we achieved in a turbulent quarter demonstrates the quality of our asset portfolio. On the liability side, we absorbed multiple large losses, while maintaining underwriting profitability.”

Looking ahead to the rest of 2022, CEO Mumenthaler said, “In an uncertain macroeconomic environment, we continue to focus on achieving our ambitious profit target of more than USD 3 billion for the Group in 2023. The successful P&C Re renewals so far this year and a good start in L&H Re and Corporate Solutions underpin our confidence, supported by rising interest rates, cost discipline and a very strong capital position. Swiss Re also successfully transitioned to a new structure as of April 2023, creating a simpler and nimbler organisation and bringing us closer to clients.”

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