2023-11-03 13:30:00
Nice turnaround for Swiss Re, which posted good results in the third quarter of 2023 and exceeded expectations. With a net income of 2.5 billion dollars, a profit of 1 billion and a return on equity (ROE) of 25.9%, the outlook is positive and contrasts with last year’s results. . Over the same period, a year earlier, the group faced a net loss of $285 million.
For John Dacey, the group’s financial director who presented the group’s nine-month results on Friday, November 3, “all activities contributed to the significant improvement in the situation and made it possible to record these good performances which return to the profits. » Such results in an environment which remains complex is, according to him, the mark of the group’s “good resilience, obtained thanks to strict discipline on costs and good results in terms of investment. » Swiss Re thus confirms its objective of achieving a net result at the end of the year of 3 billion dollars.
Across all activities, net premiums increased by 5.3% at constant exchange rate to $33.7 billion. Swiss Re’s capital position remains very solid with a Solvency ratio of 314% as of July 1, 2023. If the group was able to raise the bar so significantly, it is mainly thanks to the performance in property and casualty reinsurance and to lower losses in natural disasters (cat nat) compared to 2022.
Climate events weigh less than in 2022
In property reinsurance, Swiss Re recorded a net profit of 1.5 billion dollars compared to a loss of 283 million in 2022. This is thanks to a good performance on renewals and an increase in net income. Net premiums increased to $17.4 billion and the combined ratio improved to 94.3% for the first nine months of the year compared to 106.1% for the same period last year. .
Claims from major natural disasters cost $1.1 billion, including $421 million in the third quarter alone, mainly due to weather events in Europe, wildfires on the Hawaiian island of Maui and the earthquake. in Morocco. The weight of cat nat claims is therefore less significant than in 2022, the year when the cost of claims reached $2.5 billion.
However, Swiss Re remains cautious, particularly regarding secondary perils. “At the end of the year and in general, we expect an increase in the risks of secondary perils and increased damage activity on these risks in the years to come,” commented the financial director of the reinsurer.
Benefits at all levels
For other activities, the indicators are also positive. The healthcare segment (L&H), slightly up, recorded a profit of $241 million in the third quarter. Building on this positive dynamic, Swiss Re continues to aim for a net result at the end of the year of $900 million. The business insurance activity displays good commercial momentum with a net profit of 492 million compared to 356 million in 2022. “This reflects a solid underlying performance and lower than expected cat nat losses”, specifies John Dacey.
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On the investment side, the lights are also green, the result of a profitable strategy. Return on investments (ROI) more than doubled from 1.6% to 3.5% at the end of September. A peak of 4.8% was even reached in the third quarter thanks to capital gains made on real estate sales. “Similarly, a positive effect of rising rates continues to benefit the entire investment portfolio,” emphasizes John Dacey. Finally, the growth of iptiQ, the group’s insurtech insurance, home and automobile subsidiary, accelerated in the third quarter with $771 million in gross written premiums.
Despite these good results, Swiss Re does not plan to relax, whether in terms of cost reduction or in terms of subscription policy.
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