Reinsurer Swiss Re has revealed that its mid-year 2017 results have been impacted by a slide in profits from its P&C division, following “significant claims” in the aftermath of natural catastrophes and a challenging market environment.
The firm has reported that group net income fell 35% year-on-year to $1.2 billion (approximately £912 million) in the first six months of 2017, taking a hit from disasters that included Australia's Cyclone Debbie – which alone cost the reinsurer $360 million net in insurance claims.
“In the first half of 2017, we reported a solid result – despite the challenging market environment and having paid significant claims in the aftermath of natural catastrophes. While in the short term these drivers, especially the pricing pressures, are concerning and are being addressed, we are steering our company with long-term value creation in mind,” group chief executive officer, Christian Mumenthaler, said in a statement.
Swiss Re said that based on the company's “very strong capital position,” it is well-positioned to respond to market opportunities while continuing to focus on capital management priorities. The Group’s gross premiums written for the half-year decreased 8.3% to $18.1 billion, which the reinsurer put down to “disciplined underwriting and active portfolio management.”
For P&C reinsurance, net income in the first six months of 2017 was $546 million, compared to $870 million in the same period last year. Gross written premium also declined, coming in at $9.4 billion, down from $11.1 billion year-on-year. Swiss Re said that slide was the result of “a disciplined reduction in capacity where prices did not meet Swiss Re’s profitability expectations.”
Half-year combined ratio for the P&C division rose to 97.4% compared to 97.2% year-on-year.
Following the July P&C Re treaty renewals, which focus mainly on the Americas, the reinsurer said it had maintained an “attractive portfolio.” The treaty premium volume for the July renewals decreased by 10% and the year-to-date volume declined by 13%, it said in a statement, as it continued to allocate capital only to those opportunities that met the Group’s profitability criteria
