Swiss Re continues growth at April renewals, as nat cat drives rate increases

Global reinsurance company Swiss Re continued to expand its business at the recent April renewals, underwriting 6% more in treaty premium volumes, at US $2.5 billion, which price increases so far this year have been most significant in the natural catastrophe business.

Swiss Re reported group net income of $1.1 billion this morning, with its property and casualty reinsurance business contributing $552 million of it at a combined ratio of 84.7%.

So far this year, Swiss Re’s P&C reinsurance business has not experienced many large losses above $20 million, so the combined ratio is well within the full-year target of 87%.

However, the company’s CFO revealed a $100 million net and around $77 million gross impact from the Baltimore Bridge collapse, which affected P&C Re.

P&C reinsurance revenues continue to be driven by the strong price increases achieved at renewal rounds, although denting the IFRS 17 insurance service result after the first-quarter were some reserve additions made for large prior-year natural catastrophe and man-made loss events, as well as specific reserve additions for the pre-2020 US liability book.

Swiss Re’s Group Chief Executive Officer Christian Mumenthaler commented, “Swiss Re had a good start to the year, with all our main businesses posting strong results. This reflects continued underwriting discipline, a strong return on investments and effective management of operating expenses.”

With around 65% of Swiss Re’s reinsurance treaty business now renewed after April, the company said this equated to an 8% increase in treaty premium volumes and a +10% price increase so far this year.

At the April 1st renewals, Swiss Re renewed $2.5 billion in reinsurance premiums, which was up 6% on the prior year and saw a 12% price increase across the renewal book.

However, loss assumptions also increased 12%, as Swiss Re continued to take a “prudent view on inflation and updated loss models” the reinsurer explained.

Price increases this year so far have been most pronounced in property catastrophe reinsurance business renewed, Swiss Re explained this morning.

However, while price increases were 10% across the 2024 renewal portfolio, loss assumptions have been raised 12%, driving a -2% net price change and showing that inflationary effects and views on risk suggest little ambition to return to softening of prices.

At April 1st, Swiss Re grew its property and specialty books by 21%, while casualty shrank -27%.

Year-to-date, nat cat business grew +12% and Swiss Re said that it saw rate improvements here, but “discipline was maintained on attachment point.”

CFO John Dacey said that the Swiss Re book is around 5% bigger year-on-year, across the business.

CEO Christian Mumenthaler said, “The strong earnings in the first quarter have given Swiss Re a positive start to the year as we continue to focus on our 2024 targets, including a net income of more than USD 3.6 billion. Underwriting discipline, coupled with a favourable market environment, underpin our confidence.”

The company also announced this morning that Ivan Gonzalez, CEO Reinsurance China, has now been appointed CEO Corporate Solutions, succeeding Andreas Berger who will become group CEO as Mumenthaler departs this year.

In addition, the company said that Moses Ojeisekhoba, CEO Global Clients and Solutions and former reinsurance leader at the firm, is now set to depart the company to pursue other opportunities outside Swiss Re.