Swiss Re Corporate Solutions sees H1 profits fall 16% but CR remains below full-year target

Swiss Re Corporate Solutions saw its net income fall 16% to $220m in the first half as it suffered heavy losses from the war in Ukraine, but the business’s combined ratio remains below its target and premiums continued to rise. Parent group Swiss Re saw its net income fall to $157m in the first six months, from $1.05bn. Swiss Re returned to profitability in the second quarter with net income of $405m after a loss of $248m in Q1. The first quarter was hit by negative impacts from the financial market downturn, Covid-19 losses almost entirely in its life business and $283m of reserves for the war in Ukraine. Swiss Re did not increase its Ukraine reserves in the second quarter. Corporate Solutions said its H1 income was delivered amid first-quarter reserves related to the Ukraine war of $129m, less favourable prior-year development than the first half of 2021 and lower investment income. Swiss Re’s primary unit suffered total large losses similar to the first half of last year. Large manmade losses of $165m were higher than in the prior-year period, reflecting the Ukraine reserves, while large natural catastrophe losses were lower, amounting to $102m for the period. The unit’s dip in net income is balanced by a stable combined ratio of 93.2% for H1. It has deteriorated a touch from 92.7% this time last year but remains well within the 95% full-year target. Swiss Re Corporate Solutions’ net premiums earned increased by 13% in H1 to $2.9bn. The company said this was driven by continuous earn-through of previously realised rate increases and new business growth in selected portfolios. Swiss Re’s P&C reinsurance business saw its net income fall sharply to $316m from $1.28bn in H1 2021. The numbers were affected by “materially” lower investments results and first-quarter reserves of $154m related to the war in Ukraine. P&C Re absorbed large natural catastrophe claims of $938m in the period, mainly relating to flooding in Australia and South Africa, February storms in Europe, and a series of hailstorms in France this June. Total claims were $270m above expectations for large natural catastrophe losses in H1. P&C Re’s combined ratio was 98.5%, from 94.4% in H1 2021. Net premiums earned increased slightly to $10.56bn from $10.45bn at this stage last year. Swiss Re said this was largely a result of higher volumes and price increases, offset by adverse foreign exchange developments. At stable foreign exchange rates, net premiums earned would have increased by 3.6%. The business said it enjoyed “successful” July 2022 reinsurance renewals, when it achieved average price increases of 12%. Since the start of the year, P&C Re has achieved treaty premium volume growth of 3% and a price increase of 6%, focusing on profitable growth in natural catastrophe and specialty lines. Swiss Re's CEO Christian Mumenthaler said: “After a challenging start to the year, Swiss Re returned to profitability in the second quarter. This was supported by strong results in life and health reinsurance and corporate solutions, as well as robust underwriting performance in property and casualty reinsurance.” Group chief financial officer John Dacey added: “Rising interest rates are clearly positive for the (re)insurance sector and we are starting to see the benefits come through in our recurring income yield. With respect to inflationary trends, we remain vigilant and are taking appropriate actions, including increasing the pricing of new business and the related initial loss expectations.”

Swiss Re Corporate Solutions sees H1 profits fall 16% but CR remains below full-year target

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