Swiss Re’s full-year profit soars on higher interest rates

SWISS Re’s internet earnings rose to US$3.2 billion in 2023, pushed by larger underwriting margins and rates of interest.

The revenue was consistent with estimates and resulted in a return on fairness of twenty-two.3 per cent for the total yr, barely under the consensus estimate. Last yr’s internet earnings was US$472 million.

Swiss Re expects revenue to additional rise this yr to greater than US$3.6 billion, it stated in a launch on Friday (Feb 16).

“We are happy to have achieved all our financial targets” for final yr, chief government officer Christian Mumenthaler stated. The “priority for now and going forward is to make sure that we lower the cost of equity by having less volatile results, by being more cautious”.

Shares dropped as a lot as 3.19 per cent in Zurich and have been buying and selling 1.35 per cent decrease at 10.06 am (5.06 pm SGT).

“Our businesses are well positioned to benefit from the current market environment, while the higher interest rate environment supports recurring investment income,” chief monetary officer John Dacey stated. “This positive earnings momentum gives us confidence to increase the pay-out to investors.”

The board of administrators will suggest an elevated dividend of US$6.80 per share, Swiss Re stated.

The Zurich-based firm’s key property and casualty enterprise reported internet earnings of US$1.9 billion for final yr, in contrast with US$312 million in 2022. This displays “strong margins and positive reserve developments”, the corporate stated.

The unit targets a mixed ratio of lower than 87 per cent for 2024, it stated.

A ratio of lower than 100 per cent means income from premiums exceeds claims and bills.

Claims linked to pure catastrophes hit US$1.3 billion final yr, coming in under Swiss Re’s finances of US$1.7 billion, it stated. The claims included damages brought on by the earthquake in Turkey and Syria and by Hurricane Otis in Mexico.

Last yr, Swiss Re proposed Jacques de Vaucleroy to function interim chairman till he can formally be voted on on the subsequent shareholder assembly in April. The change was prompted by the exit of Sergio Ermotti, who had been chairman since April 2021, returning because the chief government officer at UBS Group. 

Swiss Re is amongst different giant insurers and reinsurers to desert the world’s largest local weather coalition for the trade, the Net Zero Insurance Alliance. BLOOMBERG