Swiss Re Ltd

  • ISIN: CH0126881561
  • Land: Schweiz

Nachricht vom 30.07.2021 | 07:00

Swiss Re posts strong profit of USD 1.0 billion in first half 2021

EQS Group-News: Swiss Re Ltd / Key word(s): Quarter Results
30.07.2021 / 07:00

Ad hoc announcement pursuant to Article 53 LR

  • Excluding COVID-19 losses, Group net income of USD 1.7 billion and return on equity (ROE) of 13.4%
  • Property and Casualty Reinsurance (P&C Re) net income of USD 1.2 billion
  • Successful July 2021 P&C Re renewals at attractive margins
  • Life and Health Reinsurance (L&H Re) net loss of USD 119 million; excluding COVID-19 losses, net income of USD 530 million
  • Corporate Solutions net income of USD 262 million
  • Strong return on investments (ROI) of 3.2%

 

Zurich, 30 July 2021 - Swiss Re reported a Group net income of USD 1.0 billion and an ROE of 8.2% in the first half of 2021, with very strong performance in the property and casualty businesses amid diminishing COVID-19-related impacts. Excluding COVID-19-related losses, Swiss Re's net income was USD 1.7 billion, compared with USD 865 million in the same period of the prior year.

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said: 'We are very pleased with the improved profitability achieved by the Group in the first half of this year. The focus on portfolio quality at P&C Re is delivering very strong results, and we are reaping the fruits of our decisive actions that brought Corporate Solutions back on track. Although L&H Re is still impacted by claims related to COVID-19 as we support our clients and society during this pandemic, its underlying business continues to perform well. All our businesses are growing, and our very strong capital position allows us to pursue attractive opportunities across all lines of business.'

Swiss Re's Group Chief Financial Officer John Dacey said: 'Our property and casualty businesses are on track to deliver on their ambitious combined ratio goals for this year. At L&H Re, we currently believe that the progress of the global vaccination programmes will lead to diminishing COVID-19 losses over the coming quarters. Swiss Re's asset management continues to successfully navigate financial markets and deliver strong returns for the Group.'

Swiss Re reports solid premium growth and strong investment performance

Net premiums earned and fee income for the Group increased by 7.6% year on year to USD 20.8 billion. The increase was driven by growth across many property and casualty lines and significant transactions completed in L&H Re. At constant foreign exchange rates, premiums and fees increased by 3.2%.

Swiss Re achieved an ROI of 3.2% in the first half of 2021. The investment result was largely driven by recurring income as well as equity valuation gains. The Group continues to actively manage the portfolio while prioritising the preservation of sustainable income in the persistent low-yield environment.

COVID-19 losses decreased to USD 870 million in the first half of 2021 from USD 2.5 billion in the same period of 2020. The vast majority of the current losses are attributable to the L&H Re business, while the impact on the property and casualty businesses was minimal in the first six months of 2021. Swiss Re expects COVID-19-related losses in its property and casualty businesses of less than USD 200 million for the remainder of 2021.

While highly uncertain at this time, preliminary assessments of two significant events in July - flooding in Europe and social unrest in South Africa - currently indicate a combined mid-triple-digit million US dollar loss for Swiss Re. This amount remains within the Group's large-loss expectations for the third quarter.

Swiss Re completed the streamlining of the Group's legal entity structure, which was announced in September 2020. Since 1 July 2021, Swiss Reinsurance Company Ltd is the sole direct wholly-owned operating subsidiary of Swiss Re Ltd and holds separate holding companies for the Reinsurance and Corporate Solutions Business Units, as well as the iptiQ division. The management structure remains unchanged.

P&C Re reports very strong results

P&C Re reported a net income of USD 1.2 billion in the first half of 2021, compared with a net loss of USD 519 million in the same period last year. This result reflected disciplined underwriting, continued price improvements, significantly diminishing COVID-19 impacts as well as strong investment results. The ROE was 27.2%. P&C Re's net premiums earned grew by 8.9% to USD 10.5 billion, driven by volume and price increases as well as favourable foreign exchange developments.

Natural catastrophe losses were largely in line with expectations and amounted to USD 521 million, mainly related to US winter storm Uri in the first quarter, while large man-made losses were at USD 100 million.

The combined ratio improved to 94.4% from 115.8% in the first half of 2020. As a result of disciplined underwriting and improving margins, P&C Re is on track to achieve its normalised[1] combined ratio estimate of less than 95% in 2021.

Successful July P&C Re renewals

P&C Re achieved a nominal price increase of 4% in year-to-date renewals, while the volume of treaty contracts remained largely stable at USD 16 billion. Overall price quality improved, more than offsetting the impact of decreased interest rates and adjustments to loss assumptions. In the July treaty renewals, premium volumes slightly increased, with growth in attractive natural catastrophe business in the US.

L&H Re delivers good underlying profitability

In the first half of 2021, L&H Re reported a net loss of USD 119 million in light of the continued COVID-19-related losses. These losses markedly lessened over the course of the second quarter from the first quarter. For the remainder of the year a further decrease is expected as the global vaccination programmes progress.

Excluding COVID-19 losses of USD 810 million, L&H Re's underlying business performed well, achieving a net income of USD 530 million and an ROE of 15.5%. This was primarily driven by a strong underwriting performance across all regions and favourable investment results.

Net premiums earned and fee income increased by 12.6% to USD 7.5 billion, primarily driven by longevity transactions in the EMEA region and favourable foreign exchange developments.

Corporate Solutions continues its resurgence with high profitability and pricing momentum

Corporate Solutions reported a net income of USD 262 million in the first half of 2021, following the successful turnaround in 2020. This reflects a significant improvement compared with a COVID-19-driven net loss of USD 312 million in the prior-year period[2] and was achieved in spite of large natural catastrophe losses of USD 155 million, relating to US winter storm Uri in the first quarter.

Net premiums earned rose 3.3% to USD 2.6 billion, thanks to realised rate increases and selective new business growth, while the impact of the previous portfolio pruning actions is diminishing. Year to date, Corporate Solutions achieved risk-adjusted price increases of 13%[3], as the strong pricing momentum continued.

The ROE was 21.1% and the combined ratio was 92.7%, supported by favourable prior-year development. As a result of disciplined underwriting, strict expense management and continued rate increases, Corporate Solutions is on track to achieve its targeted normalised[4] combined ratio of less than 97% in 2021.

Continued dynamic growth at iptiQ
iptiQ continued to deliver strong growth in the first half of 2021. Compared with the same period last year, gross premiums written for the core business rose by 133% to USD 333 million, with good contributions across all businesses and particularly dynamic growth in its property and casualty business in the EMEA region, which was launched in 2020. Likewise, iptiQ's gross income[5], excluding COVID-19-related losses of USD 5 million, increased by 53% compared with the first half of 2020 to USD 26 million in the first half of 2021.

Outlook
Swiss Re's Group Chief Executive Officer Christian Mumenthaler said: 'The first half of 2021 has demonstrated the strength of our business model as we see our underwriting actions deliver results. While we remain in an uncertain pandemic situation, we are confident that all our businesses are well positioned to continue to perform strongly.'

Details of H1 2021 performance

USD millions, unless otherwise stated

H1 2020[6]

H1 2020

Excluding

COVID-19[7]

H1 2021

H1 2021

Excluding

COVID-19[7]

Consolidated
Group (total)

Net premiums earned and fee income

19 329

 

20 800

 

 

Net income/loss

-1 135

865

1 046

1 735

 

Return on equity
(%, annualised)

-7.9

5.8

8.2

13.4

 

Return on investments (%, annualised)

3.2

 

3.2

 

 

Recurring income yield
(%, annualised)

2.5

 

2.3

 

 

31.12.20

 

30.06.21

 

 

Shareholders' equity

27 135

 

23 805

 

  Book value per share (USD) 93.90   82.36  

 

 

H1 2020[6]

H1 2020
Excluding
COVID-19
[7]

 

 

H1 2021

H1 2021
Excluding
COVID-19
[7]

P&C Reinsurance

Net premiums earned

9 601

 

10 453

 

Net income/loss

-519

646

1 248

1 278

Combined ratio (%)

115.8

100.5

94.4

93.9

Return on equity
(%, annualised)

-12.8

14.9

27.2

27.8

L&H Reinsurance

Net premiums earned and fee income

6 676

 

7 518

 

Net income/loss

74

516

-119

530

Recurring income yield
(%, annualised)

3.1

 

2.9

 

Return on equity
(%, annualised)

1.8

12.4

-3.7

15.5

Corporate Solutions

Net premiums earned

2 473

 

2 555

 

Net income/loss

-312

75

262

264

Combined ratio (%)

118.7

98.8

92.7

92.6

Return on equity
(%, annualised)

-26.2

5.8

21.1

21.2

               

Details of H1 2021 COVID-19 losses in USD millions

H1 2021

P&C Reinsurance

L&H Reinsurance

Corporate Solutions

Group items

Total

Event cancellation

24

 

-37

 

-13

Business interruption

12

 

20

 

32

Credit & surety

-5

 

7

 

2

Mortality

 

820

9

10

839

Other lines

18

-10

2

 

10

Total

49

810

1

10

870

 

 

Media conference call

Swiss Re will hold a virtual media conference this morning at 10:30 CEST. You can join the media conference via your computer or Teams mobile app here: Microsoft Teams Meeting. Alternatively, you can dial in (audio only) using the below numbers and conference ID:

Conference ID: 368 306 361#

Switzerland:                           +41 (0) 43 210 5761

United Kingdom:                   +44 (0) 20 3443 6271

Germany:                               +49 (0)69 3650 5756 8

France:                                   +33 (0)1 7037 8776

Hong Kong:                            +852 3704 2823

For additional local dial-in numbers, please click here.

 

Investor and analyst conference call

Swiss Re will hold an investors' and analysts' conference 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

 

[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, H1 2020 has been revised from the originally reported net loss of USD 301 million to a net loss of USD 312 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] Calculated as net income before tax expense with operating expenses, other overheads and net realised investment gains/losses removed; gross of reinsurance.

[6] For Corporate Solutions, H1 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.

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

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.

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.

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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