Swiss Re profits hike despite market conditions
Reinsurer Swiss Re posted a solid set of results for the first quarter of 2015, despite feeling the pinch in its property/casualty segment, which bore the brunt of softening rates.
Its profits grew by 17 percent to $1.4 billion in the first quarter of 2015, compared with $1.2 billion in the first quarter of 2014.
However, Swiss Re’s property/casualty reinsurance segment posted a fall in profits to $808 million in the first quarter, compared with $990 million in the first quarter of 2014. The reinsurer said this was driven by price softening and less positive reserve developments than in the prior-year period. This was partly offset by benign natural catastrophe experience and a good underwriting result.
Within the segment, Swiss Re’s combined ratio deteriorated to 84.4 percent in the first quarter of 2015, compared with 79.2 percent in the same period of the prior year.
Its premiums also fell to $3.7 billion in the quarter, compared with $3.8 billion in the first quarter of 2014, although if measured at constant exchange rates, premiums would have increased 6 percent.
Profits in Swiss Re’s life and health reinsurance segment soared to $277 million in the first quarter of 2015, compared with $64 million in the first quarter of 2014. The reinsurer said this was driven by realised gains and positive foreign exchange developments.
Michel Liès, Swiss Re's chief executive officer, said: "The current market and interest rate environment continues to be very challenging. For that reason, I am all the more pleased to say that we have been able to further grow our business profitably and achieve strong results thanks to our client- centred, differentiated approach and diversified business model. In addition, the result shows our ability to manage our risk portfolios to better mitigate challenges and seize market opportunities.
"We have nine months until the end of our financial target period 2011-2015 and we are on track to deliver on the commitments we made to our shareholders.
“Despite a challenging overall environment, the insurance market offers ample opportunities and we remain well placed to address the significant levels of underinsurance in the world today.
“In addition, our data shows that there were more natural catastrophes in 2014 than in any other year on our records - yet, over two-thirds of the world's assets do not yet have any financial protection from these events. We remain firm in our commitment to help our insurance clients to meet this challenge in a profitable and sustainable manner."
David Cole, Swiss Re's chief financial officer, added: "The first quarter has seen all business units deliver a very good start to the year. We're especially pleased that our life & Health business is on track to meet our profitability target. We've also been able to achieve a strong investment result despite ongoing low interest rates amid an environment of financial repression."
