Reinsurance giant Swiss Re has reported a positive first nine months to the year despite the impacts of large losses in the property and casualty reinsurance and Corporate Solutions divisions.
Despite the impact of roughly $1.6 billion of natural catastrophe and man-made losses during the third-quarter, Swiss Re managed to report net income of $1.1 billion for the first nine months of 2018, compared to a loss of USD 468 million in the prior year.
The P&C Reinsurance business reported net income of $634 million, following losses amounting to $1.2 billion, resulting in an annualised RoE of 8.3%.
P&C Reinsurance underwrote slightly more in premiums during the period than in the prior year at just over $13.8 billion and managed an underwriting profit with a combined ratio of 99.5% for the first nine months of the year.
The Corporate Solutions division meanwhile, suffered a loss of -$5 million, as it was heavily impacted by large man-made losses and natural catastrophes, including the collapse of the Genoa Bridge in Italy, a shipyard fire in Germany and natural catastrophes, including Hurricane Florence in the US.
Corporate Solutions also increased its premiums written to almost $3.2 billion, but with a combined ratio of 105.4% for the first nine months of this year.
Life & Health Reinsurance provided brighter news, as it delivered net income of $644 million and the Life Capital business generated $1 billion of cash gross.
Life and health reinsurance premiums written also rose, to $10.8 billion and the Life Capital unit grew as well to $2.247 billion, almost a one billion increase in premiums in that unit alone.
So Swiss Re has clearly been finding opportunities for capital deployment in 2018 so far, growing across the entire business portfolio and expanding its reinsurance and insurance underwriting.
This all helped the overall Swiss Re return on equity to 4.7% for the period, while investment income came out at 2.8%, helped by a strong mark-to-market return on equities.
Swiss Re’s Group Chief Executive Officer, Christian Mumenthaler, commented on the results, ”During the third quarter, we once again witnessed a series of natural catastrophes and large man-made disasters that devastated lives and disrupted businesses, particularly in Japan and in the US. The situation continued to be challenging in the US, with the landfall of Hurricane Michael in October. Our sympathies go out to people affected by all of the events of the past months. In these tough times, we have the financial strength to support our clients, and ultimately their customers. This demonstrates the value we can bring by swiftly paying claims to help people and businesses get back on their feet following such catastrophes.”
Swiss Re’s Group Chief Financial Officer, John Dacey, also commented, ”Following fairly benign catastrophe experience in the first half of the year, the claims burden of the third quarter was large for an individual quarter. The cumulative losses for the first nine months, however, are broadly in line with our year-to-date expectations. Large losses keep reminding us of the importance of maintaining a robust capital position to respond proactively to adverse market events. Our Group SST ratio rose during the first half, underscoring our strong capital generation, which is the basis for future actions in line with our capital management priorities.“