Swiss Re adds margin in P&C Re from hard market & new distance to cats
Swiss Re rode a hardening market and a reduction in large-loss to major margins gains in property and specialty reinsurance, sufficient to overcome a widening technical loss in casualty re, all on its way to a big net profit gain as markets delivered an expected rebound in investment income.
“The combined ratio benefitted from an improved portfolio quality and benign natural catastrophe experience in the second quarter, partially offset by strain on casualty,” management said of a 3.8 point decline in the segment’s combined ratio to 94.7% in H1 2023.
In property reinsurance lines, Swiss Re took an eye-opening 23.9 points off its H1 combined on the reduction in nat cats.
Large nat cat loss of $634 million in H1 had chiefly come in Q1 on the Turkey/Syria earthquake and New Zealand floods. H1 large man-made losses amounted to $76 million.
Specialty reinsurance lines took a similar boost in margin, cutting 14.8 points from the combined ratio to 76.0%.
Casualty is the weak link in the Swiss Re reinsurance story, diving into an H1 technical loss on an 18 point increase in its combined ratio to 118.8%. Management called out reserve additions in liability and motor.
For the full P&C reinsurance division, net earned premiums rose 7.8% to $11.37 billion, a 9.6% gain at fixed FX rates.
Gross premiums written increased by a slower 6.7% to $15.3 billion, a mix of what management called “strong performance” at the January and April renewals, offset by unfavourable foreign exchange movements.
Taken together with the rebound in investment income management attributes to the P&C reinsurance segment, Swiss Re claimed a near tripling of its segment profit to $904 million.
By the bottom line, adding in a similar gain from the group's primary commercial division Corporate Solutions and a rebound in Life & Health, Swiss Re ended the first half with a group net profit of $1.45 billion, a full nine times the depressed prior year period.
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