Swiss Re posts bullish results despite uncertainty

Swiss Re reported a bullish profit in the third quarter of 2014 and for the first nine months of 2014, which its CEO said was proof its ethos of “going the extra mile” for clients was working.

The company made a net profit or $1.2 billion in the third quarter versus $1 billion a year earlier. For the first nine months of the year, its profit hit $3.3 billion compared with $3.2 billion a year earlier.

Its property/casualty unit made the most significant contribution to these profits, driven largely by the benign catastrophe environment. The unit reported a net income of $842 million in the third quarter alone compared with $784 million in the same period a year earlier.

The company said this reflected a benign natural catastrophe experience, favourable prior year development and the release of a premium tax provision. Premiums earned rose by 9 percent to $4.3 billion ($4 billion), driven by the expiry of a quota share agreement in 2012 and large quota share treaties written in Asia and the Americas at the end of 2013.

For the first nine months of the year, the unit reported net income of $2.4 billion compared with $2.2 billion for the prior-year period. The result was driven by benign natural catastrophe and man-made losses and net reserve releases from the prior year. The combined ratio improved to 82.7 percent for the year to date compared with 83.6 percent.

Michel Liès, group chief executive of Swiss Re, said: “Swiss Re's net income over the first nine months of 2014 is a successful result. We've again made good progress towards our financial targets and we've closed significant deals that show we can provide our clients with smart risk transfer solutions. This result is proof that going the extra mile for our clients pays off, especially as the markets continue to be soft and economic conditions seem to become more uncertain.”

The company said it is now well on track to meet its 2011–2015 financial targets. New multi-year targets starting from 2016 will be announced with the Full Year 2014 Results on 19 February 2015.

It added in a statement that opportunities exist to grow further, especially in high growth markets where insurance penetration is still low but increasing wealth is generating greater demand for financial protection. Swiss Re said it expects that the long-term increase in demand will outweigh the current supply pressures in the market.

Liès added: "We understand that there is uncertainty in the market and challenges undoubtedly do exist. As a result, rigorous cycle management, portfolio steering and underwriting discipline will remain our main tools to be able to generate success going forward. We will remain firmly focused on profitable growth, while making sure we support our clients so they can pursue profitable opportunities."