Reinsurance giant Swiss Re is determined to take a positive outlook on its results, issued earlier today, but they still showed a USD$1 billion fall in net income.
For 2016, the firm reported net income of $3.6 billion, down from $4.6 billion one year earlier while return on equity was 10.6%, down from 13.7% in the previous year. The firm reported that this exceeded the group’s over-the-cycle target but earnings per share were down from $13.44 to $10.72.
However, on the positive side, premiums earned and fee income for the Group rose 10.0% to $33.2 billion (compared to $30.2 billion a year earlier). At constant exchange rates, premiums and fees increased by 12.1%, which the company states reflects growth in selected markets and lines of business, often through large and tailored transactions. Nevertheless, its combined ratio still rose to 94.8% having stood at 87.0% one year earlier.
“We report a good net income for 2016, despite navigating a difficult environment for quite some time now,” said Christian Mumenthaler, Swiss Re group chief executive.
“Amid softening market conditions, we saw minimal global economic growth and continued low interest rates last year, on top of significant political developments.”
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Focusing on its property and casualty business, net income for 2016 was $2.1 billion (vs $3.0 billion in 2015) with the year impacted by a number of large losses, notably the wildfires in Canada, the earthquake in New Zealand, and Hurricane Matthew in the US.
Meanwhile, its life and health operations saw net income decline to $807 million in 2016 (vs $968 million in 2015), primarily due to lower performance in the UK life and health portfolio.
In addition the company announced its proposal to elect Jay Ralph and Joerg Reinhardt as new, non-executive and independent members at its Annual General Meeting on April 21.
Jay Ralph was most recently a member of the board of management of Allianz
SE and Chairman at Allianz
Asset Management, with prior roles at Allianz
including CEO of Allianz
Re within Allianz
SE, Munich and CEO of Allianz
Risk Transfer, Zurich
. Joerg Reinhardt, meanwhile, has been the chairman of the board of directors of Novartis since 2013.
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