Swiss Re Group CEO Andreas Berger says he is keeping “some power dry” for growth opportunities while rejecting suggestions that earnings ambitions for next year are underwhelming.

The reinsurer is targeting group net income of $US4.5 billion ($6.8 billion), compared with this year’s target of more than $US4.4 billion ($6.6 billion). It also plans to introduce an annual share buyback program starting at $US500 million ($752 million).

Mr Berger says next year’s profit target represents a return on equity of about 20%, an attractive outcome, and the company will be careful about growth as it manages the market cycle.

“It is not about squeezing the lemon, it is about long-term stability, resilience,” he told a briefing. “We want to grow the Swiss Re franchise at the right time, when the right opportunity’s there.”

Mr Berger says “temptations abound in the market” but he has lived through many cycles and has seen mistakes made.

“The characteristics are always the same. People go into markets, grow at the wrong time. I have seen this movie before.”

He says while Swiss Re is focused on cycle management and margins, it is regularly approached about inorganic growth opportunities and is open to ideas.

“Swiss Re, as a leading reinsurance group, is always at the forefront. We are always being invited to the party,” he said. “I’d like to keep some powder dry.”

The company says it has made progress integrating artificial intelligence into underwriting, claims and data handling, with the aim of improving productivity and decision-making.

It has also mostly completed a review of underperforming life and health portfolios, focused on Australia, Israel and South Korea, after previously examining other divisions.

Combined operating ratio targets for next year are less than 85% for property and casualty reinsurance and less than 91% for Swiss Re Corporate Solutions.

Life and health reinsurance will target an increased net income of $US1.7 billion ($2.6 billion). 

“As we look ahead, we continue to focus our efforts and resources firmly on our core markets,” Mr Berger said.