Swiss Re taking a boost from markets & realignment towards ’23 goals

Global reinsurer  Swiss Re is gaining confidence in its $3 billion net profit target for 2023 as recent organisation changes dovetail with strong market conditions to generate increased optimism, top officials have stated.

“We cannot be satisfied with our results for 2022,” outgoing supervisory board chair Sergio Ermotti told shareholders at the company’s 2023 shareholder gathering. “That is why we aim to and must strengthen our profitability.”

CEO Christian Mumenthaler concurred that 2022 fell below the bar, but insisted he is “more optimistic about the future.”

“The sustainable price increases and the higher interest rates in the investment markets strengthen our profitability,” he said, citing earnings gains in Q4 and the “best January renewals in many, many years” with an 18% price gain.

As stated alongside publication of the group's 2023 results, Swiss Re will target net profits in 2023 in excess of $3 billion, a P&C reinsurance combined ratio of below 95% and net income of some $900 million in life & health reinsurance on the way to ROE at 14% by 2024.

Changes in the organisational structure designed to put underwriting decisions closer to clients plus recent management changes have the board of directors “convinced” that the group has become “even more effective and agile,” Ermotti said.

Swiss Re said in February it will split its core reinsurance business in a move to streamline its organisational structure to improve efficiency and client focus.

The move, which will split its reinsurance business into P&C and L&H lines, will allow each unit to have full authority over its respective underwriting and claims management. The restructure was to take effect from April 3. Regional president roles have been dumped in the new set-up.

Ermotti has declared his pending resignation from the Swiss Re board following word he will take up the reins at UBS. Board member Jacques de Vaucleroy has agreed to be interim chair until a formal replacement can be appointed.

“I will leave Swiss Re knowing that my work here is not yet completely finished, but that the company is well-positioned to achieve its goals,” Ermotti said.

The US and Swiss banking sectors “will remain in crisis mode for some time to come,” Ermotti claimed.

“We live in extraordinary times that call for extraordinary measures,” Ermotti said. “My mandate at UBS requires my full commitment.”

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