Global reinsurer Swiss Re has reported a profit of $996m in the second quarter of 2024, resulting in a net income of $2.1bn and a return on equity (ROE) of 20.1% for the first half of the year.
The main drivers for this result were disciplined underwriting, low natural catastrophe claims, and strong investment income, Swiss Re says in a statement. The Group's financial performance was supported by strong contributions from all business units.
Swiss Re's Group CEO Mr Andreas Berger said, "Swiss Re's performance in the first half of 2024 reflects our focus on delivering consistent results. We continue to increase the overall resilience of the firm through a disciplined approach to underwriting new business while remaining on top of loss trends across our in-force portfolios."
Swiss Re's Group CFO Mr John Dacey said, "These results highlight our focus on capital allocation discipline and quality across our underwriting and investment portfolios. Additionally, higher interest rates continue to benefit our investment income."
Insurance revenue of the Group amounted to $22.48bn. The insurance service result, which reflects the profitability of the underwriting activity, was $2.86bn.
The Group achieved a strong return on investments (ROI) of 4.0%, driven by contributions from recurring income. The recurring income yield for the first half of 2024 was 4.0%, while the reinvestment yield for the second quarter stood at 4.8%, continuing to benefit from higher interest rates.
P&C Re maintains performance with disciplined underwriting
P&C Re reported a net income of $989m in the first half of 2024. This was primarily driven by disciplined underwriting and low large natural catastrophe experience, alongside strong investment income. The insurance revenue for the first half of 2024 was $9.8bn.
In property and specialty lines, the low reported ,natural catastrophe claims in the first half of the year were partially offset by selected additions across natural catastrophe and man-made loss reserves, the large majority of which were in the form of incurred-but-not-reported reserves. P&C Re also increased reserves on specific casualty lines.
P&C Re achieved an insurance service result of $1.4bn and a combined ratio of 84.5%, despite the additions to reserves and the uncertainty load introduced on all lines since the beginning of this year. P&C Re targets a combined ratio below 87% for the full year.
Successful July P&C Re renewals
P&C Re renewed contracts with $4.5bn in treaty premium volume on 1 July 2024. This represents a 7% volume increase compared with the business that was up for renewal. Overall, P&C Re achieved a price increase of 8% in this renewal round. Based on a continued prudent view on inflation and updated loss models, loss assumptions increased by 10%.
L&H Re performance supported by improved US mortality experience
L&H Re reported a net income of $883m in the first half of 2024, reflecting positive US mortality experience and higher investment income. This was partially offset by unfavourable developments in the EMEA region.
L&H Re achieved an insurance revenue of $8.7bn and an insurance service result of $1.0bn.
Following a successful first half of 2024, L&H Re continues to target a net income of approximately $1.5bn for the full year.
Corporate Solutions continues to deliver strong results
Corporate Solutions reported a net income of $435m in the first half of 2024. The continued strong result reflects a consistent underlying business performance, further enhanced by benign claims experience in the first six months of the year and supported by a strong investment income. Insurance revenue for the first half of 2024 was $3.8bn. Nominal rates increased by approximately 3% for the first half of the year, remaining flat on a risk-adjusted basis.
Large natural catastrophe losses of $138m were mainly driven by the Noto earthquake in Japan and Tropical Cyclone Megan in Australia.
Corporate Solutions achieved an insurance service result of $509m and a combined ratio of 88.7% for the first half of 2024. Corporate Solutions targets a combined ratio below 93% for the full year.
Withdrawal from iptiQ proceeding as planned
iptiQ reported a net loss of $182m for the first half of 2024, including one-off impairments of goodwill and intangibles of (pre-tax) $111m related to the withdrawal from the business announced in May 2024.
Outlook
Mr Berger said, "After a strong start in the first half of this year, we maintain our 2024 targets, including Group net income of more than $3.6bn. Amid a challenging macroeconomic and geopolitical environment, we continue to focus on disciplined underwriting to maintain and where possible improve the resilience of our portfolios to enable delivery of consistent results."
Details of 1H 2024 performance
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1H 2024
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$ m, unless otherwise stated
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Consolidated Group (total)
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Net income
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2 088
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Insurance revenue (gross)
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22 479
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Insurance service result
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2 858
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Return on equity (%, annualised)
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20.1
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Return on investments (%, annualised)
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4.0
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Recurring income yield (%, annualised)
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4.0
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30.06.24
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Shareholders' equity
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20 436
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Book value per share ($)
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70.05
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1H 2024
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P&C Reinsurance
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Net income
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989
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Insurance revenue (gross)
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9 779
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Insurance service result
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1 411
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Combined ratio (%)
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84.5
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L&H Reinsurance
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Net income
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883
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Insurance revenue (gross)
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8 687
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Insurance service result
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1 007
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Corporate Solutions
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Net income
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435
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Insurance revenue (gross)
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3 797
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Insurance service result
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509
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Combined ratio (%)
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88.7
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Source: Swiss Re
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