Moody’s gives Swiss Re vote of confidence

Rating agency Moody’s has provided Swiss Re with a vote of confidence, following the publication of its annual results.

“Swiss Re’s results have been supported by very strong results in P&C reinsurance, benefitting significantly from below-average natural catastrophe losses during the year, leading to a reported P&C reinsurance combined ratio of 83.7 percent,” said Antonello Aquino, associate managing director, Moody's Investors Service.

However, he added that the results had been partly offset by weaker than expected results in its life and health operations. This was driven by a pre-tax loss of $344 million related to the unwinding of an asset structure related to a longevity transaction, and the loss on disposal of Admin Re’s US life subsidiary Aurora.

“Looking to the future, we note that Swiss Re reported a decrease in its risk-adjusted price adequacy ratio by 3 percentage points for the January 2015 renewals, albeit still above 100 percent at 105 percent, reflecting continued pressure on reinsurance rates.

“The company is also expecting an increase by 200bps of their combined ratio to 97 percent in 2015, driven partly by the softer rate environment. Whilst nobody is immune from the current price pressures, we consider Swiss Re to be comparatively better positioned than most reinsurers to navigate the hurdles ahead.”