World’s largest reinsurers report profit gains

Three of the world’s largest reinsurers have recently reported healthy profit gains in the second quarter of this year.
Zurich-based Swiss Re says it posted net income of CHF 1.4 billion for the first six months of 2004, up from CHF 691 million during the same period a year earlier. While the company’s premiums dropped 1.7%, it improved its underwriting results, posting a combined ratio of 96.1%, down from 99.8% the year prior. The company also turned around its investment results, posting income of CHF 659 million, versus a loss of CHF 26 million a year earlier.
Paris-based SCOR reported net income of EUR 58.1 million for the first half of 2004, up from EUR 41.9 million during the same period the year prior. While premiums were down 36.8%, this is part and parcel of the company’s restructuring move, in which it has divested itself of unprofitable lines of business. The results came on the back of underwriting, with the non-life book posting a first half combined ratio of 98.9%, a 7.5% drop over the first half of 2003. This was fortunate as investment income dropped sharply during the period, to EUR 163.4 million, an almost 50% decline from the year prior.
These results come on the heels of Munich Re’s earlier announcement of a EUR 1.2 billion profit for the first half of 2004. This compares with a loss of EUR 529 million in the first half of 2003. Much of the German reinsurer’s improvement comes from investment income, which jumped to EUR 4.1 billion from EUR 2.0 billion the year prior. The combined ratio for non-life business also improved slightly to 95.5% for the first half of this year, from 95.9% a year ago.