Global reinsurer Swiss Re generated net profit of $2.2 billion and $102 million for the first nine months and third quarter of 2024, respectively, despite previously announced addition of $2.4 billion to its liability reserves in the United States from the previous year.

Swiss Re announced earlier this month that it strengthened its property and casualty reinsurance (P&C Re) reserves by an additional $2.4 billion in the third quarter of 2024, bringing total reserve additions for the 9 months of 2024 to $3.1 billion, partially offset by releases in other lines, resulting in a year-ago net reserve strengthening of $2 billion during the quarter.

The reinsurer specifies that this strengthening has “accelerated the achievement of the Group’s objective of positioning itself globally
P&C reserves are at the upper end of the “best estimate” range, while the establishment of a provision for uncertainty on new business is designed to support the strength of the company’s reserves going forward. .

“Strengthening the overall resilience of the Group has been a key priority for the management team. Thanks to the decisive actions taken in the third quarter, which follow an extensive review, we have achieved our objective of positioning all property and casualty provisions at the upper end of the best estimate range,” said Andreas Berger, CEO of the Swiss Re group.

But despite significant reserve additions in the first nine months of the year, Swiss Re’s P&C Re arm still generated a net profit of $603 million for the 9 months 2024, thanks to strong underwriting performance of the current year.

Indeed, P&C Re’s insurance services profit, which reflects the profitability of the underwriting activity, amounts to $1 billion during the first 9 months of 2024 with a combined ratio of 92.8%. . The strengthening of reserves added 13.3 percentage points to the combined ratio and as a result, Swiss Re confirmed that the segment is now not expected to achieve its combined ratio target below 87% for 2024.

Major natural disasters also impacted the P&C Re sector during the period, with total losses of $813 million, of which $743 million was attributable to the third quarter. The claims primarily relate to the severe hailstorm that hit Calgary, Canada, Storm Boris in Europe, and Hurricanes Debby and Helene in the United States.

The P&C Re segment’s insurance revenue for the nine-month period was $15 billion.

Within its life and health reinsurance division (L&H Re), net income reached $1.2 billion for the first 9 months of 2024, reflecting strong investment income and healthy in-force margins. The reinsurer notes that during the period, mortality developments in the United States remained slightly favorable compared to expectations, offset by unfavorable developments mainly in the EMEA region.

In total, L&H Re generated a net profit of $12.6 billion and an insurance services result of $1.2 billion for the first 9 months of 2024. Swiss Re still expects the The unit is targeting net profit of $1.5 billion for the full year 2024.

In Corporate Solutions, the company’s commercial insurance business, net income for the 9 months 2024 was $642 million, driven by strong underlying business performance and strong investment income. Insurance revenue in the first 9 months of 2024 reached $5.8 billion, as natural big cat claims totaled $294 million, driven by Tropical Cyclone Megan in Australia, Hurricane Helene in the United States and the hailstorm in Calgary.

The Corporate Solutions business generated insurance services income of $739 million and a combined ratio of 89.4% for the first 9 months of 2024, and is on track to achieve its combined ratio target of less than 93 % for the whole year.

Regarding iptiQ, Swiss Re notes that the withdrawal is proceeding as planned, recalling its November 5 announcement that digital insurer’s European property and casualty business sold to Allianz Direct. The company generated a loss of $241 million for the 9 months 2024, including one-time goodwill and intangible asset impairments of $111 million related to the withdrawal of the business announced in May.

All of the above resulted in Group net profit of $2.2 billion and ROE of 13.4% for the first 9 months of 2024. Group insurance revenue reached $33.7 billion of dollars and the result of insurance services totaled 2.9 billion dollars.

Swiss Re achieved a return on investments of 3.9% over the nine-month period, which the operator attributes to a continued strong contribution from recurring revenue.

“All of our business units continue to generate attractive underlying performance through disciplined underwriting and capital allocation. This is also supported by a significant positive contribution from investment income,” said John Dacey, Swiss Re Group Chief Financial Officer.

Assuming normal losses for the remainder of the year, Swiss Re expects to generate net profit of more than $3 billion for 2024. Looking ahead to the fourth quarter, Swiss Re expects losses due to Hurricane Milton will be less than $300 million.

“The significant strengthening of reserves in the third quarter creates a solid foundation for success in the years to come. The Group’s financial situation remains solid, which places us in a favorable position for future renewals. We plan to update the market with new targets for 2025 next month,” Berger said.