Swiss Re P&C H1 reinsurance net income jumps 38%

Swiss Re has significantly increased its earnings in the P&C reinsurance business in the first half of 2018 due to a “strong” underwriting performance supported by a benign large loss experience.

The net income in P&C reinsurance was up 38 percent year on year in the first half of 2018 at $752 million.

The combined ratio improved to 92.9 percent in the first six months of 2018 from 97.4 percent for the same period in 2017.

Gross premiums written in P&C increased by 1.8 percent to $9.6 billion in the first six months of 2018, also reflecting positive foreign exchange rate development.

In the July P&C reinsurance treaty renewals, which focus mainly on the Americas, Swiss Re price quality improved by 2 percent and rate increases were most pronounced in loss-affected property lines, the company said. Moderate rate increases were seen in most other portfolios and regions. Year-to-date, the treaty premium volume increased by 9 percent to $14.4 billion.

“It is positive to see that the market environment is gradually recovering,” said CEO Christian Mumenthaler. “We improved our profitability and underwriting performance, especially in P&C, and our solid results show the value of our diversified book of business. I’m also pleased that we were able to grow as a Group overall,” Mumenthaler added.

The group’s gross premiums written increased 8.0 percent year on year to $19.6 billion, mainly due to premium growth across the group’s life and health businesses. The group net income declined to $1.01 billion in the first six months from $1.21 billion in the same period a year ago. The results included the impact of a new US GAAP guidance on recognition and measurement of equity investments resulting in an estimated negative effect on pre-tax earnings of €265 million for the first six months of 2018.

Swiss Re’s chief financial officer John Dacey, said: “We continued to experience volatility in our results due to the US GAAP accounting change, as previously communicated. Adjusting for the change, our results clearly show that the quality of the earnings has improved, especially our P&C underwriting performance. In addition, our investment result shows that we maintain a high-quality portfolio, demonstrated by our stable running yield. We continue to be very well capitalised and are ready for any challenge that lies ahead.”

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