Corporate Solutions boosts net income by 43% as Swiss Re rebounds after tough 2022

Swiss Re Corporate Solutions increased net income by 42% to $678m last year, as its parent group saw profits jump 580% to $3.21bn from $472m following a difficult 2022. Corporate Solutions said 2023 net income was helped by “steadily improved portfolio resilience”, on the back of disciplined underwriting and portfolio steering. Corporate Solutions’ performance also benefitted from a higher investment result. Net premiums earned were stable at $5.48bn, but up 7.3% at constant exchange rates and excluding the elipsLife business that was sold in 2022. Premiums were boosted by new business – mainly in property, credit and surety, and accident and health. This was partially offset by “conscious” reductions in professional liability lines, said Swiss Re Corporate Solutions. The business said risk-adjusted price quality improved by 3% in 2023. Corporate Solutions’ combined ratio was 91.7% from 93.1% in 2022 and below its 94% target. The group said it has revised the methodology used to calculate the combined ratio to include interest on funds withheld. The 2023 combined ratio reflects large nat cat losses of 2.6 percentage points, large man-made losses of 7.3% percentage points, and favourable prior-year development of 1.9% percentage points. The numbers at Corporate Solutions helped Swiss Re recover from a difficult 2022, when higher-than-expected nat cat claims of $2.7bn, underwriting losses in its P&C Re business and an additional $1.1bn set aside in reserves to counter the risk of higher inflation led to less-than-stellar results. It was a particularly tough 2022 for Swiss Re’s core P&C Re business that saw its net income fall 86% to $312m from $2.2bn in 2021.The unit’s result was hit by higher economic inflation, with the bulk of its new group reserves at $1bn set against the P&C Re unit. But P&C Re led Swiss Re’s fight back in 2022, reporting net income up 499% to $1.87bn. The company said strong margins and positive reserve developments in property and speciality lines helped offset reserve strengthening in the casualty business this year. In addition, the result was supported by a solid investment performance. Large natural catastrophe claims amounted to $1.3bn in 2023, below the full-year budget of $1.7bn. P&C Re net premiums earned increased 3.9% to $22.88bn last year. At constant foreign exchange rates, net premiums earned increased by 4.3%. The P&C Re combined ratio was 94.8% for the full year compared to 102.4% in 2022. This is just below the 95% target. The unit increased premium volume by 9% at the January 2024 renewals and achieved price increases of 9%. Swiss Re said its group numbers were supported by improved underwriting margins while higher interest rates drove an rise in investment income. Group net premiums earned and fee income rose 4.4% to $45bn for full year. At constant foreign exchange rates, net premiums earned and fee income increased by 4.9%. Swiss Re said its return on investment increased “materially” last year to 3.4% from 2% in 2022. The group has confirmed the financial target of $3.6bn group net income for this year. The target combined ratio for corporate solutions is below 93% and below 87% for P&C Re. Swiss Re’s group CEO Christian Mumenthaler said 2023 was a success. “We achieved all our financial targets in a year that was characterised by geopolitical turbulence and continued economic uncertainty. Improved price adequacy in our property and casualty businesses following strong renewals and our underwriting discipline helped us to manage elevated industry losses from natural catastrophes, while L&H Re achieved a solid result, benefitting from active in-force portfolio management and a strong investment performance,” he said.

Corporate Solutions boosts net income by 43% as Swiss Re rebounds after tough 2022

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