Swiss Re reports strong 3Q 2016 net income amid difficult market environment

by Mina Martin 04 Nov 2016

Swiss Re reports strong 3Q 2016 net income amid difficult market environment

Zurich-based Swiss Re has reported a strong net income of US$3.0 billion for the first nine months of 2016, with all business units contributing to this result, amid a “difficult market environment.”

The net income result, compared to US$3.7 billion for the same period in 2015, was “supported by large and tailored transactions and a strong investment result,” and “partially offset by losses from large natural catastrophes and difficult market environment,” Swiss Re said in a statement.

The annualised Group return on equity (ROE) for the first nine months was 11.6%, compared to 14.5% for 3Q 2015, with earnings per share of US$ 9.15 (vs US$ 10.69 for 9M 2015).

Christian Mumenthaler, Swiss Re Group CEO, said: "We delivered strong earnings in the first nine months, despite a continued difficult environment across the entire industry.”

“Our results once more demonstrate that our underwriting discipline and our differentiation position us well for long-term success. We continue to focus on profitable growth while also addressing the protection gap in regions where people are still not insured... Innovation and technology will help us get there," he said.

Net income in Property and Casualty (P&C) reinsurance fell to US$1.5 billion in the first nine months of 2016, as compared to US$2.3 billion in the prior-year period. Its annualised ROE for the first nine months was 16.1% (9M 2015: 23.5%).

Life & Health (L&H) reinsurance net income was at US$ 635 million for the first nine months, down from US$781 million for the same period in 2015; and delivered an ROE of 12.5% (9M 2015: 17%), above Swiss Re’s target of 10%-12%.

Corporate Solutions posted a net income of US$150 million in the first nine months, a decline from the US$337 million net income it delivered in the prior-year period.  The ROE was 8.6% (9M 2015: 19.4%)

Life Capital, which was created January 2016 to manage Swiss Re’s closed and open life and health insurance books, achieved a net income of US$726 million and an ROE of 14.5%.

Swiss Re has also reported that it will commence its share public buy-back programme on 4 November 2016, with plans to repurchase CHF 1.0 billion. The public share buy-back programme, authorised by Swiss Re’s shareholders in April 2016, aims to return capital to shareholders “when excess capital is available and other business opportunities do not meet its profitability requirements,” Swiss Re said.

Related stories:
Swiss Re's H1 2016 earnings reflect 'turbulent times'
Telematics to further digitise insurance