SWISS Re’s net income rose to US$3.2 billion in 2023, driven by higher underwriting margins and interest rates.
The profit was in line with estimates and resulted in a return on equity of 22.3 per cent for the full year, slightly below the consensus estimate. Last year’s net income was US$472 million.
Swiss Re expects profit to further rise this year to more than US$3.6 billion, it said in a release on Friday (Feb 16).
“We are happy to have achieved all our financial targets” for last year, chief executive officer Christian Mumenthaler said. The “priority for now and going forward is to make sure that we lower the cost of equity by having less volatile results, by being more cautious”.
Shares dropped as much as 3.19 per cent in Zurich and were trading 1.35 per cent lower at 10.06 am (5.06 pm SGT).
“Our businesses are well positioned to benefit from the current market environment, while the higher interest rate environment supports recurring investment income,” chief financial officer John Dacey said. “This positive earnings momentum gives us confidence to increase the pay-out to investors.”
The board of directors will propose an increased dividend of US$6.80 per share, Swiss Re said.
The Zurich-based company’s key property and casualty business reported net income of US$1.9 billion for last year, compared with US$312 million in 2022. This reflects “strong margins and positive reserve developments”, the company said.
The unit targets a combined ratio of less than 87 per cent for 2024, it said.
A ratio of less than 100 per cent means revenue from premiums exceeds claims and expenses.
Claims linked to natural catastrophes hit US$1.3 billion last year, coming in below Swiss Re’s budget of US$1.7 billion, it said. The claims included damages caused by the earthquake in Turkey and Syria and by Hurricane Otis in Mexico.
Last year, Swiss Re proposed Jacques de Vaucleroy to serve as interim chairman until he can formally be voted on at the next shareholder meeting in April. The change was prompted by the exit of Sergio Ermotti, who had been chairman since April 2021, returning as the chief executive officer at UBS Group.
Swiss Re is among other large insurers and reinsurers to abandon the world’s biggest climate coalition for the industry, the Net Zero Insurance Alliance. BLOOMBERG
