Swiss Re 'satisfied' after price rises, higher retentions

Swiss Re says it is satisfied with the outcome of January property & casualty (P&C) reinsurance renewals, which were dominated by a “need to review pricing, wordings and structures” following a spate of natural catastrophes.

The 2022 floods in NSW and Queensland intensified urgency to achieve significant price increases and higher retentions for insurers ceding risk, Swiss Re’s latest annual report says.

“We are satisfied with the results we achieved,” it says.

P&C Re achieved a price increase overall of 18% in the January renewals, with improved rates in all lines of business. Swiss Re says this more than offset higher loss assumptions of 13%, which reflect “a prudent view on economic inflation and loss model updates”.

Treaty contracts with a $US10.2 billion ($14.8 billion) in premium volume were renewed, representing a 13% volume increase compared with the business up for renewal, and the company says growth of 21% was achieved in the natural catastrophe book.

Last year marked the second consecutive year where Swiss Re’s P&C losses were over $US100 billion, continuing a trend of 5-7% average annual increases over the past decade.

Swiss Re is targeting net income of more than $US3 billion ($4.48 billion) this year, and announced changes to its organisational structure last month. From April, the Reinsurance Business Unit will be split into separate L&H Re and P&C Re business units, each with its own focused underwriting.

A new Global Clients and Solutions business unit aims to improve engagement with large clients and advance strategic growth areas.

“The Swiss Re that we are building is designed to be a nimbler, leaner reinsurer, where employees are more empowered, decision making is swift and there is improved accountability in the market,” the company says.