Swiss Re has achieved a 15.6% return on equity after a strong performance in the second quarter of 2011.

Group net income increased 18% to $960m in the second quarter of 2011, compared with $810m for the same period last year.

The reinsurer’s property & casualty unit reported a combined ratio of 78.4%, compared to 102.0% last year.

Swiss Re said: “The volatility of financial markets in the wake of recent sovereign debt issues in Europe remains a concern. After starting to take resolute steps from late 2009 to reduce sovereign debt exposure to non-AAA rated European government bonds, Swiss Re now holds only $78m in sovereign debt issued by peripheral eurozone countries.”

Renewals

Up to June 30, Swiss Re’s total treaty portfolio rose by $2bn to $12.2bn. The strongest growth originated in Asia.

Swiss Re said the reinsurance market has started to turn, and expects further improvements over the next 6 to18 months.