Swiss Re bullish on 2021 earnings growth in a hardening market

Based on the improving market conditions and targeted growth opportunities, global reinsurer Swiss Re is confident of achieving a normalised combined ratio in property & casualty reinsurance of less than or equal to 96 percent in 2021.

The Switzerland-based reinsurer believes the outlook is positive for next year, despite the impact from COVID-19 in 2020. The company is seeing solid underlying earnings momentum on the back of its capital strength and a "proactive" reserving approach.

Chief executive Christian Mumenthaler highlighted that the 2021 financial targets and capital management priorities will focus on superior capitalisation and a stable or increasing dividend.

"We are optimistic on the outlook for all of our businesses as we see positive momentum in the underlying earnings power of the Group," said Mumenthaler. "Our confidence is underpinned by Swiss Re’s capital strength and the proactive approach we have taken to the Group’s COVID-19 reserves."

"We expect that COVID-19 will remain an earnings and not a capital event for the Group, with declining exposures going forward," he added.

Swiss Re said its P&C reinsurance unit is pursuing targeted growth opportunities in a hardening market, focusing on expanding underwriting margins, partly to offset the negative impacts of lower interest rates.

Meanwhile, the life & health reinsurance is aiming to maintain its growth driven by strong new business generation, particular in Asia.

Its Corporate Solutions’ business is confident of achieving a normalised combined ratio that is less than or equal to its 98 percent target in 2021.

Swiss Re noted that a pronounced hard market offers opportunities for profitable growth in areas where Corporate Solutions has a proven competitive advantage.

Furthermore, the company is looking to pursue risk partnerships to open up new long-term opportunities for growth.

"We are focused on delivering on our financial targets and capital management priorities. At the same time, our strategy positions Swiss Re for long-term success," said Mumenthaler.