Swiss Re reports a 21% increase in net income for 2013 Q1
May 2, 2013 by Canadian Underwriter
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Swiss Re has seen a 21% increase in net income for the first quarter of 2013 — from $1.1 billion in 2012 Q1 to $1.4 billion in 2013 Q1. All figures are in U.S. currency.
Very strong underwriting performances across the company’s property & casualty reinsurance and corporate solutions businesses were key drivers of this performance, according to the company.
The combined ratio was 72.4%, continuing the improving trend seen over the past years, according to the company.
“We are starting our 150th anniversary year with a very strong first quarter result. It demonstrates we have the right strategy and structure in place to reach our 2011-2015 financial targets,” Michel M. Liès, Swiss Re’s Group CEO, said. “The successful April renewals are another proof of Swiss Re’s ability to perform and grow despite economic headwinds and a continuous low interest rate environment.”
Premium and fee income increased 9% to $6.8 billion, as compared to $6.2 billion in 2012 Q1, due to organic growth, the expiry of a 20% quota share agreement with Berkshire Hathaway and comparatively low losses from man-made and natural catastrophes during the first three months of 2013.
The company’s annualized return on investments was 3.4% in 2013 Q1, as compared to 4% in 2012 Q1.
“The Group portfolio is fundamentally in very good shape but we will continue to focus on areas of underperformance,” George Quinn, Swiss Re’s Group CFO, said. “We will not hesitate to take decisive action to further improve overall returns.”
Return on equity improved from 15.3% in 2012 Q1 to 16.6% in 2013 Q1.
Net income in the p&c reinsurance sector increased 53% from $660 million to $1 billion. The primary driver for this performance was a very strong underwriting result. In addition, reserve releases and lower than expected claims due to the absence of major man-made or natural catastrophes contributed to the result, the company reported. Premiums earned during the first quarter rose by 15% to $3.5 billion — as compared to $3.1 billion in the prior year period — mainly due to the expiry of a 20% quota share agreement with Berkshire Hathaway at the end of 2012 and premiums earned from large transactions concluded in the course of last year.
The P&C Re combined ratio during the first three months was 69.7%, a significant improvement over the 85% reported last year.
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