Swiss Re reports a 74% increase in profit in 2010

Swiss Re reported a 74% increase in its 2010 profits, showing a full-year net income of $863 million in 2010, compared to a $496 million net income in 2009.
The reinsurer’s return on equity was 3.6% in 2010, up from 2.3% in 2009.
The above results include the impact of the termination of a convertible perpetual capital instrument (CPCI) issued to Berkshire Hathaway. Excluding the impact of the CPCI termination, full-year 2010 net income was $2.3 billion and return on equity was 9.2%.
“Property and casualty (P&C) delivered very strong results due to disciplined underwriting and despite a high level of natural catastrophe losses,” Swiss Re announced. “Operating income was $2.5 billion, down 30% due to the higher large loss experience and lower net investment income. The combined ratio was 93.9%, compared to 88.3% in 2009.”
The company’s preliminary estimate of claims from the Australian floods in the first quarter of 2011 is $225 million. Swiss Re also estimates claims from the Australian cyclone Yasi will be approximately $100 million.