May 4, 2017 by Canadian Underwriter
Swiss Re Ltd. reported Thursday a 2.3-point increase in its first-quarter combined ratio, as the reinsurer expects more than $300 million in claims from Cyclone Debbie, which caused widespread flooding in late March in Australia.
Zurich-based Swiss Re released May 4 its financial results for the three months ending March 31, recording gross written premiums in property and casualty reinsurance of $5.78 billion in the first three months of this year, a 17.6% drop from $7 billion during the first quarter of 2016. All figures are in United States dollars.
That drop was “the result of the active reduction in capacity,” Swiss Re stated, “in particular” its quota share business in China, Europe, the Middle East and Africa. This was “partly because prices did not meet profitability expectations,” Swiss Re added. “Measured at constant foreign exchange rates,” the drop in P&C reinsurance gross premiums written would have been 15.6%.
“We have responded decisively to the continued pricing pressure across the industry by not accepting unprofitable business, and our top line clearly shows that,” stated Christian Mumenthaler, chief executive officer of Swiss Re Group, in a press release.
Swiss Re’s combined ratio in P&C reinsurance deteriorated by 2.3 points, from 93.3% in Q1 2016 to 95.6% in the latest quarter.
Swiss Re said it expects claims for Cyclone Debbie to “amount to” about US$350 million at the group level, of which about $30 million would be incurred by Swiss Re Corporate Solutions and the other US$320 million incurred by its P&C reinsurance arm.
In its global catastrophe recap released in early April, Aon plc’s Impact Forecasting unit reported that Cyclone Debbie made landfall March 28 in Queensland, Australia.
“Preliminary data from the Insurance Council of Australia cited 35,370 claims filed” with an estimated value of US$310 million, Impact Forecasting said at the time. “These totals were expected to rise in the coming weeks.”
The worst damage in Australia from Debbie was in southeastern Queensland and northern New South Wales, “where the storm’s remnants prompted torrential rainfall,” Impact Forecasting said at the time. “Widespread severe flooding inundated several towns and communities and caused extensive damage to infrastructure and the agricultural sector economic cost will be even higher.”
Swiss Re said Thursday its total gross written premiums for the most recent quarter were $10.2 billion, of which $3.2 billion was from life and health, $717 million was from corporate solutions and $652 million was from life capital.
In a separate announcement, Swiss Re reported April 27 that Adrian Hall is appointed CEO of Swiss Re Corporate Solutions in Canada May 1. Hall, who is from Britain originally, is a former chief customer officer for RSA Insurance in Canada. Swiss Re Corporate Solutions already writes commercial primary insurance in Canada.
“There is no sudden shift in what the Canadian focus is,” Hall told Canadian Underwriter earlier. “The change really is having a CEO to focus on the Canadian market and deliver the ongoing strategy that Swiss Re Corporate Solutions has.”
In its earnings release May 4, Swiss Re said its corporate solutions unit opened a new office in the Malaysian capital of Kuala Lumpur in March 2017.