5 May 2015 Insurance

Soapbox: 2014 results

Argo Group

GWP: UP 1.1% ($1.91bn)

Net income: UP 28% ($183.2m)

“Argo Group posted improved underwriting margins for the year, despite ever-increasing competitive pressures.

“We reported record underwriting income in 2014 and a return on average shareholders’ equity of 11.4 percent.”

Mark Watson, CEO, Argo Group

Hannover Re

GWP: UP 2.9% (€14.4bn)

Net income:  UP 10% (€985.6m)

“The successful financial year was based on a 25 percent rise in net income in life and health reinsurance and the continued good underwriting result in property and casualty reinsurance.

“Furthermore, we were able to slightly improve our investment income despite the challenging market environment.”

Ulrich Wallin, CEO, Hannover Re

Munich Re

GWP: DOWN -4.3% (€48.8bn)

Net income: DOWN -4.9% (€3.17bn)*

“We continue to focus on our profit-oriented underwriting policy and offer our clients individual solutions. And we benefit from our diversification into primary insurance-based and specialised market segments.”

Torsten Jeworrek, reinsurance CEO, Munich Re

*Consolidated profit


GWP: DOWN -9% ($16.3bn)

Net income: UP ($742m) (2013: -$254m)*

“I am delighted to report a strong rebound in earnings with the 2014 net profit after tax up by $1 billion to $742 million. It is also pleasing to deliver a result broadly in line with previous targets and market expectations, notwithstanding economic headwinds including foreign exchange movements and a $324 million discount rate impact, $206 million of which impacted the second half result alone.

“An especially pleasing aspect of the result was the improved combined operating ratio of 96.1 percent and the absence of adverse prior year claims development, an issue that has weighed heavily on past results and undermined confidence in our balance sheet and future earnings potential.”

John Neal, group CEO, QBE

*Because comparable figure is a negative value a percentage comparison is meaningless


GWP: UP 3.2% ($7.5bn)

Net income: UP ($1.6bn)(2013: -$573.4m)*

“Our results in 2014 were the best in our 29-year history, with record underwriting profit of $552 million and record net earnings of $1,633 million.

“We had a record combined ratio of 90.8 percent, with OdysseyRe at 84.7 percent and all our major insurance companies having combined ratios less than 100 percent. We also had net investment gains of
$1.74 billion in 2014, including realised gains of $791 million.

“We are maintaining our defensive equity hedges and deflation protection as we remain concerned about the financial markets and the economic outlook in this global deflationary environment.”

Prem Watsa, chairman and CEO, Fairfax

*Because comparable figure is a negative value a percentage comparison is meaningless


GWP: UP 7.3% ($5.9bn)

Net income: UP 67.2% ($998.2m)

“We had an excellent year in 2014, posting an operating return on equity of 13.5 percent, above our long-term average. While financial markets remained somewhat volatile during the year, we realised sizeable gains in our investment portfolio, which when combined with the strong operating results, culminated in our delivering dividend-adjusted tangible book value growth in excess of 19 percent. These results are particularly gratifying given the very difficult reinsurance operating environment.

“Recently we announced a deal with AXIS Capital to combine the two companies as a reinsurance and specialty insurance market leader. We are very excited about this transaction. While both PartnerRe and AXIS are strong, well-positioned, successful companies in their own right, the combination of the two only enhances those strengths and accelerates our strategies.

“Together, we will have greater scale, with a more efficient global network, even stronger underwriting teams, an expanded underwriting platform, and a greater ability to deliver the best service to our clients, while creating long-term value for our shareholders.”

David Zwiener, interim CEO, PartnerRe

Swiss Re

GWP: UP 1% ($33.3bn)

Net income: DOWN -20% ($3.5bn)

“Through our disciplined underwriting approach and active differentiation, Swiss Re generated strong earnings despite the challenging industry environment. We also succeeded in serving our clients by providing knowledge, expertise and services beyond our core re/insurance capacity.

“Our performance, together with our capital position, supports the proposed significant capital distribution of around $3.7 billion to our shareholders. In addition, we addressed issues in the underperforming areas. As a result, we are confident in our ability to reach our 2011–2015 financial targets.”

Michel Liès, CEO, Swiss Re


GWP: UP 10.4% (€11.3m)

Net income: DOWN -6.7% (€512m)

*If an exceptional gain on purchase of €183 million linked to Generali US in 2013 is excluded, profits increase by 40 percent in 2014.

“The technical profitability of SCOR Global P&C, which delivers a combined ratio of 91.4 percent, and that of SCOR Global Life, which records a technical margin of 7.1 percent, are highly satisfactory. Despite the weakness of interest rates, SCOR Global Investments records a return on assets of 2.9 percent.

“SCOR once again delivers solid profitability, and achieves a solvency level in line with its strategic targets. Having invested in new underwriting and risk modelling tools, the SCOR group has prepared for the new prudential regime, Solvency II, which will come into force on January 1, 2016. It is confident in its ability to meet the challenges of a difficult financial environment, a heightened competitive situation and a demanding new prudential regime.”

Denis Kessler, CEO, SCOR

XL Group

GWP: UP 4.6% ($7.8bn)

Net income: DOWN -82% ($188.3m)

*Excluding the impact of the sale and retrocession of XL Life Reinsurance to GreyCastle Holdings, net income was $1.2 billion. GWP refers to its P&C operations only.

“XL delivered a very strong 2014 including continued progress in insurance and an extraordinary year in reinsurance. Many of our results were the best we have achieved in over 15 years, including our property and casualty combined ratio of 88.2 percent.

“Insurance results included a 2014 combined ratio of 94.4 percent, the best performance since 2007, and a loss ratio of 63.2 percent. And our reinsurance segment achieved a stellar 73.3 percent combined ratio, one of its best performances as well.

“Of course, these results were helped, in part, by one of the lowest catastrophe years we have seen in years. To build on our success, we intend to continue developing and delivering outstanding products and services to our current and new markets, continuing to move this progress forward.”

Mike McGavick, CEO, XL

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