Swiss Re made a profit of $3.2 billion in 2023, after an increase of $472 million in 2022. The reinsurance group benefited from a good investment result and lower catastrophe losses than in the previous year. When renewing contracts, Swiss Re implemented further price increases, the company said.
Swiss Re has exceeded its self-imposed target of an annual profit of $3 billion. The group’s net premiums earned and fee income rose 4.4 percent year-on-year to $45 billion.
The exchange rates slowed things down: using constant exchange rates, the increase was 4.9 percent, writes Swiss Re.
Shareholders benefit from higher dividends
The company was able to surprise positively with the significantly increased dividend: shareholders should benefit from the increase in profits via a dividend increased by 40 cents to $6.80. The continued very robust capital base provides the basis for this. With the result, Swiss Re exceeded analysts’ expectations for net premiums, although the profit was roughly in line with forecasts.
Caption: Profit target exceeded: Swiss Re currently has no plans to buy back shares, according to CFO John Dacey. REUTERS/Moritz Hager
In property and liability reinsurance, Swiss Re increased profits to 1.9 billion dollars after just 312 million in the previous year. This is due to “robust underwriting performance and disciplined contract renewals,” it said. During underwriting, applications are checked, risks are assessed and contracts are concluded accordingly.
Positive balance in major losses, life business and corporate solutions
Major losses from natural disasters amounted to $1.3 billion in 2023, which was below the annual budget of $1.7 billion. The reinsurer counts the earthquakes in Turkey and Syria at the beginning of the year as among the most important natural disasters. Hurricane Otis in Mexico in the fourth quarter and several storms in Europe throughout the year also contributed to costs.
In the life business, which deals with life and health insurers, Swiss Re exceeded its own targets with a profit of 976 million dollars (previous year: 416 million). The result is the result of active management of existing contracts and strong investment performance. This compensated for higher death benefits in the USA.
Swiss Re also earned more in the Corporate Solutions division, which offers solutions related to insurance protection. Here, Swiss Re was able to record a profit of $678 million (previous year: $486 million). The division’s portfolio has steadily improved. The still young digital insurance division (IptiQ) was able to further expand its business and increase gross premiums by almost 30 percent to $1.1 billion. The loss fell to $247 million from $362 million previously.
Price increases in 2024
Swiss Re CFO John Dacey expects to be able to implement tariff increases of the same magnitude as in the January renewal round later in the year. At the beginning of 2024, the reinsurer was able to enforce price increases of around 9 percent on the contracts that were up for renewal. For the current year, Swiss Re has also increased its loss assumptions by around 11 percent.
For the current year, Swiss Re has now increased its loss assumptions by around 11 percent. About half of this is due to inflation and changed model assumptions for individual risks.