Swiss Re reports H1 2016 earnings

Global reinsurance firm reports a decline in 2016 half-year net income from prior-year period as a result of continued difficult market environment

Insurance News

By Mina Martin

Swiss Reinsurance Company Ltd. (Swiss Re) has reported a net income of US$1.9 billion for the first half of 2016, down from US$ 2.3 billion for the same period in 2015, in a period marked by natural catastrophes, political uncertainty, and volatile financial markets.

Net income in reinsurance is significantly contributed by large and tailored transactions and strong investment result, partially offset by a number of large natural catastrophes in Property and Casualty (P&C) Reinsurance in the second quarter of 2016. Aggregate losses in P&C Re were estimated at approximately US$ 350 million (net of retrocession and before tax).

The annualised Group return on equity (ROE) for the first half was 10.9 per cent, (down from 13.5 per cent for H1 2015) with earnings per share (EPS) of US$5.61, compared with US$ 6.60 for the prior-year period.

Premiums earned and fee income for the Group increased by 9.6 per cent from US$14.7 billion in H1 2015 to US$16.1 billion for the first six months of 2016. At constant exchange rates, premiums and fees increased by 12.1 per cent, reflecting growth in selected markets and lines of business. The Group’s combined ratio in the H1 2016 was 98.0 per cent, compared to 88.9 per cent from prior-year period.

Christian Mumenthaler, Swiss Re’s Group CEO, said: "We have a solid result for the first half 2016 despite a challenging second quarter that was marked by a difficult macroeconomic environment as well as more pronounced natural catastrophe losses and large reported claims in our Corporate Solutions Business Unit.”

“The overall picture confirms the strength of our brand, while demonstrating our outstanding client access. These attributes and the focus on underwriting discipline together with our excellent capitalisation will help us navigate, and potentially benefit from, the turbulent times."

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