Profitable Swiss Re shifts towards casualty
Swiss Re posted solid profits in the first quarter of 2014 and grew its property/casualty reinsurance book by almost 8 percent. But it also noted that it has been readjusting its portfolio towards casualty and away from increasingly competitive catastrophe business.
The Swiss reinsurer made a net profit of $1.2 billion in the quarter, a slight decrease on the $1.4 billion it made a year earlier. Its gross written premiums including fee income increased by around 11 percent to $7.6 billion.
Its property/casualty book was the biggest contributor to both profit and growth. The unit posted a net profit of $1 billion, premium growth of 7.9 percent, taking its gross written premiums to $3.8 billion. The unit’s combined ratio was 78.8 percent compared with 69.7 percent in the quarter a year earlier, which it said reflected a higher impact of man-made losses and lower reserve releases.
Swiss Re described the contribution from its property & casualty reinsurance segment as impressive and also noted that it had enjoyed a very successful April renewals with volumes up by 14 percent and rates still at attractive levels.
To achieve this, however, it noted that it had shifted the emphasis of its portfolio. “Swiss Re successfully diversified its portfolio through tailored large transactions, writing less natural catastrophe business and expanding into casualty, which has seen profitable growth across all regions. This is in line with Swiss Re's strategy to allocate capital to lines of business with the most attractive returns,” it said.
“I'm pleased with the first quarter performance of our Group. P&C Re had another remarkable quarter. L&H Re wrote significant profitable new business, and while the US GAAP result is below expectations, we are making good progress in strengthening the underlying business. Corporate Solutions continued growing profitably in the quarter and Admin Re has become a solid and steady cash generator for the Group. I'm confident that all segments will contribute to achieving our 2011—2015 financial targets," said Michel Liès, Swiss Re's group chief executive officer.
David Cole, Swiss Re's group chief financial officer, added: "The momentum that we generated over the past few years has continued into the first quarter of 2014. The strong combined ratios posted by Reinsurance and Corporate Solutions reflect our strong commitment to underwriting and the result in asset management highlights the strengths of our well-positioned investment portfolio. Meanwhile, our capital management remains unchanged – we aim to pay an attractive regular dividend and to deploy capital to profitable business opportunities."