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Swiss Re cashes in despite tough market

Swiss Re has reported an 11% increase in net profit to $US2.3 billion ($3.1 billion) for the first half of this year.

Property and casualty (P&C) reinsurance was its leading segment, with a net profit of $US1.3 billion ($1.8 billion), followed by life and health reinsurance on $US495 million ($676 million), Admin Re on $US249 million ($340 million) and corporate solutions on $US239 million ($326 million).

Group CEO Michel Liès says the result “adds to our long track record of solid underwriting and investment performances” despite “volatile” capital markets and a challenging pricing environment.

“Despite the ongoing uncertainty about overall economic growth in many areas of the world – as shown by continued historically low interest rates – we were able to support our underwriting expertise with a strong investment result.”

The P&C result was down from $US1.5 billion ($2.1 billion) in the corresponding period last year. It benefitted from a “benign natural catastrophe experience… but was affected by price softening and changes in the business mix”.

The half-year combined operating ratio deteriorated to 88.7%, from 86.1% in the first half of last year.

Premium earned was almost flat at $US7.3 billion ($9.9 billion).

Swiss Re Corporate Solutions’ net income growth of 64% was driven by profitable performance across most business lines.

The division continued to expand its geographic presence, opening an office in Melbourne, its eighth in the Asia-Pacific region. It completed the acquisition of Sun Alliance Insurance China in May, and is now licensed and operating in mainland China as Swiss Re Corporate Solutions Insurance China.

July treaty renewals, which focus on the Americas, Australia and New Zealand, were successful. Swiss Re increased treaty renewal premium volume by 31%.

“Even though market conditions are difficult, it is important to not lose sight of the many opportunities we have for our industry,” Mr Liès said. “Addressing the current high levels of underinsurance presents an important long-term chance for (re)insurers to grow.”