Swiss Reinsurance Company's (Swiss Re') operating performance metrics, particularly in more recent years, have been supportive of a strong operating performance assessment, says AM Best.
The global reinsurance giant reported a strong net profit under IFRS of $2.1bn in the first half of 2024 (compared with $1.8bn restated in the prior year), reflecting the follow-through of corrective underwriting actions taken in recent years, below budget natural catastrophe losses, and the solid performance of the L&H Reinsurance division. In this period, the group reported solid combined ratios of 88.7% (net-gross) for Corporate Solutions and 84.5% (net-net) for P&C Reinsurance, despite the continued strengthening of its US casualty reserves.
Prospectively, underwriting performance is expected to remain robust, supported by favourable market conditions and effective cycle management.
AM Best has affirmed the Financial Strength Rating (FSR) of ‘A+’ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of ‘aa’ (Superior) of Swiss Re and most rated operating affiliates, all subsidiaries of Swiss Re. At the same time, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IRs) on the debt and the indicative Long-Term IRs on securities available under Swiss Re’s debt issuance programme. The outlook of these credit ratings is ‘Stable’.
Additionally, AM Best has maintained the “under review with negative implications status” for the FSR of ‘A+’ (Superior) and the Long-Term ICR of ‘aa’ (Superior) of iptiQ Life (Luxembourg), as well as the FSR of ‘A’ (Excellent) and the Long-Term ICR of ‘a”’(Excellent) of Lumico Life Insurance Company (Jefferson City, MO) and Elips Life Insurance Company (Jefferson City, MO). Concurrently, AM Best has withdrawn the ratings of iptiQ Life, Lumico Life Insurance Company, and Elips Life Insurance Company as the companies have requested to no longer participate in AM Best’s interactive rating process.
The ratings reflect Swiss Re’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, very favourable business profile, and very strong enterprise risk management.
Swiss Re’s balance sheet strength is underpinned by its consolidated risk-adjusted capitalisation that is comfortably in excess of AM Best’s minimum requirement for the strongest assessment level, as measured by Best’s Capital Adequacy Ratio (BCAR). The assessment considers the group’s conservative asset allocation, strong asset liability management capabilities, and low dependence on retrocession coverage. In addition, Swiss Re’s financial flexibility is excellent, supported by effective capital management.
Swiss Re maintains a leading position in the global reinsurance market. In AM Best’s view, the group’s strong brand and excellent geographic diversification partly insulate it from competition in the international reinsurance market and leave it well-positioned to navigate the underwriting cycle.
The FSR of ‘A+’ (Superior) and the Long-Term ICR of ‘aa’ (Superior) have been affirmed with a stable outlook for Swiss Re and its following affiliates:
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Swiss Re Asia Pte. Ltd.
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Swiss Re Europe S.A.
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Swiss Re International SE
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Swiss Re Life & Health America Inc.
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Swiss Reinsurance America Corporation
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Westport Insurance Corporation
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Swiss Re Corporate Solutions America Insurance Corporation
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Swiss Re Corporate Solutions Premier Insurance Corporation
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Swiss Re Corporate Solutions Elite Insurance Corporation
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Swiss Re Corporate Solutions Capacity Insurance Corporation
The Long-Term ICR of “a” (Excellent) has been affirmed with a ‘Stable’ outlook for Swiss Re America Holding Corporation.
To read the AM Best report, please click here.