Swiss Re’s P&C combined ratio was 97.2% for the first quarter, slightly less profitable than the 86.5% posted by German rival Munich Re; both reinsurers had higher than anticipated cat losses, driven by Turkey’s earthquakes.
The world’s biggest two reinsurers both enjoyed profitable first quarters, using words such as “solid” and “resilience” to describe their performance amid a mixed picture just three months into 2023.
Swiss Re revealed a P&C combined ratio of 97.2% for the first quarter, slightly less profitable than the 86.5% posted by German rival Munich Re.
Profitable quarters for both reinsurers came despite “major” natural catastrophe losses that affected their property and casualty (P&C) underwriting results.
“In property-casualty reinsurance, major losses from natural catastrophes were higher than expected,” Munich Re’s quarterly statement said.
Swiss Re reported a successful April 2023 renewals, with price increase of 19% achieved, building on rate gains already achieved in the January renewals.
The effects of P&C price rises for the biggest two reinsurers globally has been offset by P&C cedants’ claims due to natural disasters – led by the Turkish earthquakes.
“In property-casualty reinsurance, major losses from natural catastrophes were higher than expected,” Munich Re’s quarterly statement said.
At Swiss Re, P&C net income of $369m for the first quarter, compared well with $85m in the same period in 2022, despite large natural catastrophe claims.
These were driven mostly by the earthquake in Turkey and Syria, for which the reinsurer booked some $426m in net claims, based on a market loss estimate of $5.3bn, as well as Cyclone Gabrielle and floods in New Zealand.
Munich Re said it anticipates a net result of about €4bn for the 2023 financial year. Surpassing this target has become more likely due to the Q1 result.
Swiss Re’s P&C combined ratio was in line with its full-year target of below 95%, the reinsurer observed, as the business earns the majority of its natural catastrophe-exposed premiums in the second half of the year.
“The first-quarter results demonstrate the resilience of all our main businesses, supported by adequate pricing, higher investment returns and cost discipline,” said Christian Mumenthaler, Swiss Re’s group CEO.
The reinsurer said it renewed contracts worth $2.6bn in treaty premium on 1 April, a 5% volume increase compared with the business that was up for renewal.
Overall, Swiss Re’s P&C arm achieved a price increase of 19% in this renewal round. This more than offset higher loss assumptions of 13%, which continue to reflect a prudent view on economic inflation and loss model updates, the company said.
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