Swiss Re reveals full-year financial results

Swiss Re reveals full-year financial results | Insurance Business Canada

Reinsurance

Swiss Re reveals full-year financial results

Reinsurer has also set its target net income for 2024

Reinsurance

By
Kenneth Araullo

Swiss Re has reported an increase in its net income – reaching US$3.2 billion for the year 2023, with the fourth quarter contributing US$748 million to this total.

The firm also noted a robust return on equity (ROE) of 22.3% for the same period. In light of these positive financial outcomes, the board of directors intends to propose a dividend increase to US$6.80 per share. Looking forward, Swiss Re has set a target net income of over US$3.6 billion for 2024 under IFRS accounting standards.

The reinsurer’s financial results represent a significant improvement from the previous year’s figures of US$472 million net income and a 2.6% ROE. This turnaround, Swiss Re explained, was driven by better underwriting margins and a rise in investment income due to increased interest rates.

Swiss Re’s net premiums earned and fee income also saw growth of 4.4% to US$45.0 billion in 2023, up from US$43.1 billion the previous year. Adjusted for constant foreign exchange rates, this represents a 4.9% increase.

The company’s investment return for the year jumped to 3.4% from 2.0% in 2022, with recurring income yield rising to 3.6% from 2.6% the previous year, benefitting from the higher interest rate environment. By the fourth quarter, the recurring income yield had increased to 3.9%, with the reinvestment yield reaching 5.0%.

Swiss Re maintained a strong capital position throughout the year, supported by robust earnings and the positive effects of higher interest rates, with the Group Swiss Solvency Test (SST) ratio comfortably exceeding its 200–250% target range as of January 1, 2024.

Swiss Re segment results

The property and casualty reinsurance (P&C Re) division reported a net income of US$1.9 billion for 2023, up from US$312 million in the previous year, thanks to what the firm described as resilient underwriting and disciplined renewals. The division managed to keep large natural catastrophe claims at US$1.3 billion, below the budgeted US$1.7 billion, despite significant events such as the earthquake in Turkey and Syria, Hurricane Otis in Mexico, and various storms and floods in Europe.

P&C Re’s net premiums earned rose by 3.9% to US$22.9 billion, and its combined ratio for the year was 94.8%, achieving the target of less than 95%.

During the January renewals, P&C Re successfully increased its premium volume by 9% to US$13.1 billion, with a price increase of 9% and updated loss assumptions due to inflation and model adjustments.

The life and health reinsurance (L&H Re) segment also surpassed its net income target, reporting US$976 million for 2023, up from US$416 million in the previous year. This result was supported by strategic portfolio management and strong investment performance, the company said, despite higher mortality claims in the US. The segment’s net premiums earned and fee income rose by 4.4% to US$15.6 billion.

Corporate Solutions continued its strong performance streak with a net income of US$678 million in 2023, up from US$486 million in the previous year, attributed to improved portfolio resilience and a higher investment result.

Net premiums earned remained steady at US$5.5 billion, with an adjusted increase of 7.3% when excluding the sold elipsLife business. The division’s combined ratio was 91.7%, surpassing the target of less than 94%.

“Swiss Re can look back on a successful 2023. We achieved all our financial targets in a year that was characterized by geopolitical turbulence and continued economic uncertainty,” CEO Christian Mumenthaler said.

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