Swiss Re Ltd

  • ISIN: CH0126881561
  • Land: Schweiz

Nachricht vom 30.04.2021 | 07:00

Swiss Re reports first-quarter net income of USD 333 million, driven by strong underlying performance of all businesses

EQS Group-News: Swiss Re Ltd / Key word(s): Quarter Results
30.04.2021 / 07:00

7

 

  • Excluding COVID-19 claims and reserves, Group net income of USD 843 million and return on equity (ROE) of 12.9%
  • Property and Casualty Reinsurance (P&C Re) net income of USD 477 million; ROE of 21.6%
  • Successful April 2021 P&C Re renewals, with growth at attractive margins
  • Life and Health Reinsurance (L&H Re) net loss of USD 184 million; excluding COVID-19 losses, net income of USD 270 million and ROE of 16.8%
  • Corporate Solutions net income of USD 96 million; ROE of 16.2%
  • Strong return on investments (ROI) of 3.5%

Zurich, 30 April 2021 - Swiss Re reported a Group net income of USD 333 million in the first quarter of 2021, as the strong underlying performance of all businesses more than offset losses related to COVID-19 (USD 643 million) and large natural catastrophes (USD 426 million). Excluding COVID-19-related claims and reserves, Swiss Re's net income was USD 843 million.

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said: 'The start of 2021 has seen record numbers of COVID-19-related deaths in many countries, and our thoughts go out to those who have lost a loved one. The devastating human toll of the pandemic is also reflected in the financial results of Swiss Re as the world's largest life and health reinsurer. As we continue to support our clients and communities affected by the pandemic, the underlying performance of all our businesses remains very strong and underpins our confidence.'

Swiss Re's Group Chief Financial Officer John Dacey said: 'The return to profitability this quarter in our property and casualty businesses underlines the earnings potential of our diversified business model. We effectively absorbed the heightened mortality impact on our life and health business and maintained a very strong capital position.'

Swiss Re achieved a strong ROI of 3.5% in the first quarter of 2021. The investment result was driven largely by recurring income supplemented by gains from equity valuations. The result reflected an effective balance of active management and preservation of sustainable income.

 

P&C Re delivers strong performance, driven by focus on underwriting margins and portfolio quality

P&C Re reported a net income of USD 477 million in the first quarter, up significantly from USD 61 million in the same period last year. This is the result of continued price improvements and disciplined underwriting, which also contained the large natural catastrophe losses of USD 316 million, primarily relating to US winter storms. Excluding COVID-19 impacts, P&C Re's net income was USD 509 million.

P&C Re's net premiums earned increased by 5.7% to USD 5.0 billion, driven by strong new business growth in 2020, which continues to earn through in 2021.

The ROE was 21.6% and the combined ratio was 96.5%, despite higher-than-expected natural catastrophe losses as well as COVID-19 impacts. As a result of improving margins, P&C Re is on track to achieve its normalised[1] combined ratio estimate of less than 95% in 2021.

Successful April P&C Re renewals

In April 2021, P&C Re renewed treaty contracts with USD 2.6 billion in premium volume. This represents a 20% increase in volume compared with the business that was up for renewal, reflecting attractive transaction opportunities and pricing. P&C Re achieved a nominal price increase of 4% in this renewal round, more than offsetting lower interest rates and higher loss assumptions.

L&H Re achieves strong underlying net income and ROE

L&H Re continued to see significant COVID-19-related losses of USD 570 million, driven by high mortality rates in the US and other countries, and reported a net loss of USD 184 million for the first quarter of 2021.

In the US, the first three months of 2021 saw the highest mortality since the start of the pandemic, with more than 200 000 reported deaths from COVID-19. Since March, the average daily mortality has significantly declined as vaccination efforts progress.

Excluding COVID-19 claims and reserves, L&H Re's underlying business achieved very strong results, with a net income of USD 270 million and an ROE of 16.8%. This was supported by a strong underwriting performance across all regions and favourable investment results.

Net premiums earned and fee income increased by 13.8% to USD 3.8 billion, primarily driven by longevity transactions in the EMEA region.

Corporate Solutions swings to profit after successful turnaround

For the first quarter of 2021, Corporate Solutions reported a net income of USD 96 million, compared with a net loss of USD 166 million in the prior-year period[2], reflecting a continuation of the successful turnaround achieved in 2020 and the diminishing impact of COVID-19-related losses. Excluding the COVID-19-related impacts, net income was USD 112 million.

Net premiums earned remained stable at USD 1.2 billion, as realised rate increases and growth in selected areas offset the impact of previous portfolio pruning measures. The strong pricing momentum experienced in 2020 continued in the first quarter of 2021, with Corporate Solutions achieving risk-adjusted price increases of 13%.[3]

The ROE amounted to 16.2% and the combined ratio was 96.0%, despite higher-than-expected natural catastrophe losses of USD 110 million. As a result of disciplined underwriting, strict expense management and continued rate increases, the Business Unit is on track to achieve its targeted normalised[4] combined ratio of less than 97% in 2021.

Continued dynamic growth at iptiQ

iptiQ continued its strong track record of growth in the first quarter of 2021. Compared with the same period last year, gross premiums written for the core business rose by 150% to USD 167 million, as iptiQ expanded its property and casualty business in the EMEA region.

Outlook
Swiss Re's Group Chief Executive Officer Christian Mumenthaler said: 'We have seen a solid start to 2021 and expect all our businesses to continue delivering a strong underlying performance with diminishing COVID-19 losses. I am particularly encouraged by the improving profitability in our property and casualty businesses, supported by strong renewals year to date in improving market conditions.'

 

 

Details of Q1 2021 performance

 

 

 

Q1 2020[5]

Q1 2020

Excluding

COVID-19[6]

Q1 2021

Q1 2021

Excluding

COVID-19[6]

Consolidated
Group (Total)

Net premiums earned and fee income
(USD millions)

9 586

 

10 212

 

 

Net income/loss
(USD millions)

-225

158

333

843

 

Return on equity
(%, annualised)

-3.1

2.2

5.2

12.9

 

Return on investments (%, annualised)

3.2

 

3.5

 

 

Recurring income yield
(%, annualised)

2.5

 

2.1

 

    31.12.20   31.03.21  

 

Shareholders' equity (USD millions)

27 135

 

24 586

 

 

Book value per share (USD)

93.90

 

85.17

 

 

 

Q1 2020[5]

Q1 2020

Excluding
COVID-19[6]

Q1 2021

Q1 2021

Excluding
COVID-19[6]

P&C Reinsurance

Net premiums earned
(USD millions)

4 737

 

5 008

 

 

Net income
(USD millions)

61

272

477

509

 

Combined ratio (%)

110.8

105.5

96.5

95.6

 

Return on equity
(%, annualised)

3.0

13.2

21.6

23.0

L&H Reinsurance

Net premiums earned and fee income
(USD millions)

3 366

 

3 832

 

 

Net income/loss
(USD millions)

299

 

-184

270

 

Recurring income yield
(%, annualised)

3.1

 

2.7

 

 

Return on equity
(%, annualised)

15.8

 

-11.8

16.8

Corporate Solutions

Net premiums earned
(USD millions)

1 221

 

1 215

 

 

Net income/loss (USD millions)

-166

6

96

112

 

Combined ratio (%)

120.6

102.3

96.0

94.4

 

Return on equity
(%, annualised)

-29.8

1.0

16.2

18.8

 


Details of Q1 2021 COVID-19 claims and reserves in USD millions

Q1 2021

P&C Reinsurance

L&H Reinsurance

Corporate Solutions

Group items

Total

Event cancellation

25

 

-7

 

18

Business interruption

11

 

20

 

31

Credit & surety

-4

 

1

 

-3

Mortality

 

570

6

9

585

Other lines

13

 

-1

 

12

Total

45

570

19

9

643

               

 

 

[1]  Assumes an average large natural catastrophe loss burden and excludes prior-year reserve development as well as the COVID-19 impact.

[2]  For Corporate Solutions, Q1 2020 has been revised from the originally reported net loss of USD 167 million to a net loss of USD 166 million to reflect the results of elipsLife, which as of 1 January 2021 is reported as part of Corporate Solutions following the disbandment of the Life Capital Business Unit at the end of 2020.

[3]  Excludes elipsLife.

[4]  Assumes an average large natural catastrophe loss burden and excludes prior-year reserve development as well as the COVID-19 impact.

[5] For Corporate Solutions, Q1 2020 has been revised to reflect the results of elipsLife, which as of 1 January 2021 is reported as part of Corporate Solutions following the disbandment of the Life Capital Business Unit at the end of 2020.

[6] This column is for reference only and excludes the impact of the reserves established for COVID-19-related claims, including estimated tax impacts.

 

 

 

Media conference call

Swiss Re will hold a media call this morning at 08:30 CEST. In order to participate, please dial in 10 minutes prior to the start of the conference using the following numbers:

 

Switzerland:   +41 (0) 58 310 5000

United Kingdom:   +44 (0) 207 107 0613

United States:   +1 (1) 631 570 5613

Germany:   +49 (0)69 5050 0082

France:    +33 (0)1 7091 8706

Hong Kong:   +852 5808 1769

 

Investor and analyst call

Swiss Re will hold an investors' and analysts' call at 14:00 CEST, which will focus exclusively on Q&A. You are kindly requested to dial into the conference call 10-15 minutes prior to the start using the following numbers:
 

Switzerland:   +41 (0) 58 310 5000

United Kingdom:  +44 (0) 207 107 0613

United States:  +1 (1) 631 570 5613

Germany:   +49 (0) 69 5050 0082

France:    +33 (0) 1 7091 8706

 

 

 

Swiss Re
The Swiss Re Group is one of the world's leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk - from natural catastrophes to climate change, from ageing populations to cyber crime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally.

For further information please contact Swiss Re Media Relations: +41 (0)43 285 7171 or Media_Relations@Swissre.com.
Please use this link to access the Swiss Re website.

Cautionary note on forward-looking statements
Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets, and trends) and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact. Further information on forward looking statements can be found in the Legal Notice section of Swiss Re's website.



End of Media Release



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