Swiss Re says the California fires and other large catastrophes hit its property and casualty reinsurance results in the first quarter.

The division posted net income of $US527 million ($822 million), down from $US555 million ($865 million) a year earlier, while insurance service earnings – a measure of underwriting profitability – fell to $US575 million ($896 million) from $US704 million ($1.1 billion).

Swiss Re says the P&C reinsurance unit “absorbed elevated large loss activity during the period, while the gain from the sale of a minority equity position supported the result”.

Large man-made losses totalled $US140 million ($218 million). Major natural catastrophe claims cost $US570 million ($889 million) in the quarter, accounting for 29% of the full-year large natural catastrophe claims budget.  

Swiss Re says most natural catastrophe losses “related to the Los Angeles wildfires”. The reinsurer said in February it was expecting less than $US700 million ($1.09 billion) in claims from the fires.

The reinsurer’s overall net income grew 16% to $US1.27 billion ($1.98 billion), supported by improved results from other units including life and health reinsurance.

“With a turbulent start to the year, we remain vigilant and focused on maintaining our strong foundations,” group CEO Andreas Berger said.

“Thanks to the decisive actions we took in 2024, all our businesses are well positioned and have delivered a robust performance in the first quarter. Alongside our continued focus on cost discipline and efficiency, this gives us confidence in our 2025 targets despite a challenging environment.” 

At the April renewals, P&C reinsurance recorded a price increase of 1.5%. It renewed contracts with $US2.2 billion ($3.43 billion) of treaty volume on April 1.

“Based on a prudent view on inflation and updated loss models, loss assumptions increased by 3.7%,” Swiss Re says. “The resulting portfolio quality is supportive of the group’s 2025 financial targets.”