Swiss Re boosts profits; warns of challenges

Swiss Re has reported very positive results for 2013 but warned it is aware of the challenges ahead. It also announced the appointment of a new CFO.

The world’s second biggest reinsurer reported a 6 percent increase in net income to $4.4 billion in 2013 compared with $4.2 billion in 2012 due to solid underwriting, particularly in the P&C businesses, low levels of natural catastrophes and reserve releases totalling $1 billion. The group also reported a combined ratio of 85.3 percent.

“All business units contributed to this excellent result, with a particularly strong performance from P&C Re and continued profitable growth from Corporate Solutions,” said Michel Liès, Swiss Re's group chief executive officer. “We are very happy that we have achieved so much in financial terms in our anniversary year and, while we are well aware of the challenges ahead, we look forward to 2014 with confidence.”

P&C Re’s net income increased from $3.3 billion in 2013, compared with $3 billion in 2012, while L&H Re delivered a net income of $356 million for 2013 compared with $739 million in 2012. The company said the decrease in profits was attributed to reserve strengthening of $369 million for group’s disability business in Australia and the impact of business recapture in the first quarter. However, in the fourth quarter the sector gained a sizeable health deal in Asia.

The Corporate Solutions business reported a 43 percent increase in its net income making $279 million in 2013, compared with $196 million in 2012. Net earned premiums increased to $2.9 billion, supported by growth across most lines of business and the expiry of a quota share agreement.

Meanwhile the reinsurer’s closed life business, Admin Re, delivered strong profits of $423 million in 2013, compared with $183 million in 2012.

Overall, Swiss Re reported decreased price levels in the January renewals, particularly for natural catastrophe business. Risk-adjusted price quality declined by 3.6 percent and the company’s business volume was reduced by 6 percent.

The company also promoted David Cole to group chief financial officer. He was previously group chief risk officer. He will take on his new role in May 2014.

"As our group chief risk officer for the last three years, he has gained vast experience in regulatory matters, which are becoming increasingly critical for our industry. The appointment of an internal candidate shows the depth of talent we have at Swiss Re,” said Walter Kielholz, chairman of the Board of Directors of Swiss Re of Cole’s appointment.

Cole joined Swiss Re in November 2010 and became Group CRO in March 2011. Prior to this, he had been with ABN Amro Holding, a Netherlands-based banking group, where he last served as CFO and CRO.

He has also held a number of risk management and client relationship management positions and worked in several countries in Europe and the Americas.

A new group CRO will be announced in due course.