Swiss Re posts 2022 net income of $472m after tumultuous year

Swiss Re reported a net income of $472 million for 2022, with a net income of $757 million in the fourth quarter.

Swiss Re’s Group chief executive Christian Mumenthaler said: “2022 was a challenging year, marked by the war in Ukraine, surging inflation, the tail end of the COVID-19 pandemic and elevated natural catastrophe losses.

”We have focused on addressing these challenges proactively, all while maintaining our very strong capital position. This has enabled us to take advantage of attractive market conditions at the January renewals, while continuing our commitment to the ordinary dividend.”

Swiss Re’s Group chief financial officer John Dacey said: “Throughout the year, Swiss Re took measures to add $1.1 billion in reserves1 to address the risk of higher claims due to economic inflation across our property and casualty businesses.

”Higher interest rates are already helping to compensate for this impact, with the contribution from our fixed-income portfolio rising by $170m in the fourth quarter compared with the prior-year period.

Hurricane Ian drives a year of large cat losses

P&C Re reported a net income of $312m for 2022, supported by a strong fourth-quarter net income of $595 million. The full-year result was negatively impacted by higher-than-expected economic inflation.

Large natural catastrophe claims were above expectations at $2.7 billion, mainly from Hurricane Ian, floods in Australia and South Africa, hailstorms in France, winter storms in Europe and the US as well as a series of other smaller events. 

Net premiums earned increased slightly to $22 billion, supported by continued price improvements over the year. 

The reported P&C Re combined ratio was 102.4% for the full year. The normalised combined ratio for 2022 was 96.9%, above the target of less than 94%, mostly due to the impacts of economic inflation.

January P&C Re renewals reflect elevated risk environment

P&C Re renewed treaty contracts with $10.2 billion in premium volume on 1 January 2023. This represents a 13% volume increase compared with the business that was up for renewal. Healthy growth of 21% was achieved in the natural catastrophe book.

Overall, P&C Re achieved a price increase of 18% in this renewal round, with improved rates in all lines of business. This more than offset higher loss assumptions of 13%, which reflect a prudent view on economic inflation and loss model updates.

For 2023, the Group targets a net income of more than $3 billion, supported by attractive market conditions, an expected decline in COVID-19 claims, higher interest rates and cost discipline. 

P&C Re will move away from its normalisation approach to target a reported combined ratio of less than 95% for 2023.

Mumenthaler added: “2023 has started well, with successful January renewals reflecting our ambition to drive profitability and create value for shareholders, while continuing to support clients.

”Our investment portfolio is well-positioned to benefit from rising interest rates, and we do not expect a return of high COVID-19 claims that we had seen over the past years.

”Despite the uncertain macroeconomic environment, we are confident in the Group’s ability to deliver on the new ambitious targets.”