Swiss Re reported strong results for the first quarter of 2015, with net income rising 17 percent to $1.4 billion and ROE of 16.1 percent, “driven by profitability across all Business Units and strong investment results.”
Highlights for Swiss Re’s business operating divisions were listed as follows:
— Property & Casualty Reinsurance net income of $808 million and ROE of 22.7 percent, reflecting sound underwriting and benign natural catastrophe experience.
— Life & Health Reinsurance net income of $277 million and ROE of 17.2 percent; on track to meet its 10-12 percent ROE target
— Corporate Solutions net income of $167 million; strong ROE of 29.0 percent
— Admin Re® net income of $206 million and gross cash generation of USD 52 million; ROE 12.7 percent
— Price quality of P&C Re portfolio remains attractive following April renewals
Swiss Re also noted that “despite the ongoing challenges from further declining interest rates and market uncertainty,” it “delivered a strong return on investments of 3.9 percent,” and is “on track to reach its 2011-2015 financial targets by the end of this year.”
CEO Michel M. Liès commented: “The current market and interest rate environment continues to be very challenging. For that reason, I am all the more pleased to say that we have been able to further grow our business profitably and achieve strong results thanks to our client-centered, differentiated approach and diversified business model. In addition, the result shows our ability to manage our risk portfolios to better mitigate challenges and seize market opportunities.”
The most important developments during the first quarter were listed as follows:
— Swiss Re’s Group net income of $1.4 billion in the first quarter of 2015 was 17 percent higher than the $1.2 billion reported for Q1 2014.
— Premiums earned and fee income of $7.6 billion for the Group was in line with the prior-year quarter. Measured at constant foreign exchange rates, premiums earned and fee income increased by 7 percent.
— The investment result was strong at $1.1 billion ($1.1 billion in Q1 2014). The annualized return on investments increased to 3.9 percent in the first quarter of 2015 (vs 3.7 percent).
— The Group’s Swiss Solvency Test (SST) ratio was 223 percent as reflected in the submission to FINMA at the end of April 2015, reaffirming the Group’s very strong capital position.
David Cole, Swiss Re’s Group CFO, said: “The first quarter has seen all Business Units deliver a very good start to the year. We’re especially pleased that our Life & Health business is on track to meet our profitability target. We’ve also been able to achieve a strong investment result despite ongoing low interest rates amid an environment of financial repression.”
P&C Re reported net income of $808 million, compared to $990 million in Q1 2014. Swiss Re explained that the “result benefited from benign natural catastrophe experience and a good underwriting result,” which were, however, “offset by price softening and less positive reserve developments than in the prior-year period.”
Premiums earned during the first quarter decreased slightly to $3.77 billion compared to the $3.81 billion in the first quarter of 2014, which the announcement said was “mainly due to foreign exchange translations. If measured at constant foreign exchange rates, premiums would have increased by 6 percent. This underlying increase was driven by further growth in the casualty business, particularly in the US and EMEA regions.”
P&C Re’s combined ratio during the first three months of the year was 84.4 percent, compared to 79.2 percent in Q1 2014, “benefiting from a lower than expected level of natural catastrophe losses and reserve releases.”