- Net premiums earned and fee income: USD 28,443 million (+10.2%), of which:
- P&C Reinsurance: USD 14,213 million (+16.5%)
- L&H Reinsurance: USD 9,494 million (-0.0%, stable)
- Corporate Solutions: USD 3,105 million (+7.6%)
- Life Capital: USD 1,631 million (+34.3%)
- Return on investments: 4.3% (+1.5 pp.)
- Return on equity (annualized): 6.0% (+1.3 pp.), of which:
- P&C Reinsurance: 11.8% (+3.5 pp.)
- L&H Reinsurance: 11.8% (-0.7 pp.)
- Corporate Solutions: -29.8% (-29.5 pp.)
- Life Capital: 0.9% (+0.8 pp.)
- Combined ratio:
- P&C Reinsurance: 101.4% (+1.9 pp.)
- Corporate Solutions: 127.0% (+21.6 pp.)
- Net income: USD 1,343 million (+23.2%), of which:
- P&C Reinsurance: USD 880 million (+38.8%)
- L&H Reinsurance: USD 651 million (+10.9%)
- Corporate Solutions: USD (441) million [loss; 9M2018: USD (5) million]
- Life Capital: USD 40 million (+900.0%)
P&C Reinsurance
P&C Reinsurance reported a 39% increase in net income for the first nine months to USD 880 million, supported by profitable business growth and investment performance. Net premiums earned increased 17% to USD 14.2 billion, driven by large transactions and growth in the natural catastrophe business. The ROE improved to 11.8% from 8.3%. The combined ratio was 101.4%. P&C Reinsurance continues to be on track to achieve a normalized combined ratio of 98% in 2019.
The underwriting performance was impacted by USD 1.1 billion of large claims from natural catastrophes in the current year, including approximately USD 460 million from Typhoon Faxai in Japan and approximately USD 300 million from Hurricane Dorian in the Atlantic. Swiss Re estimates total insured market losses at approximately USD 7 billion for Typhoon Faxai and approximately USD 4.5 billion for Hurricane Dorian. Estimated claims from large man-made events amounted to approximately USD 310 million and included losses stemming from the Ethiopian Airlines crash and the subsequent grounding of the Boeing 737 MAX fleet and the compulsory liquidation of Thomas Cook. The underwriting performance was also impacted by late claims development from Typhoon Jebi in the first quarter, in line with a material increase in the total market loss.
L&H Reinsurance delivered stable net income of USD 651 million for the nine months, driven by active portfolio management actions and improved mortality developments in the Americas. The result was also supported by the investment performance. ROE was 11.8%, in line with the business segment's target range. Net premiums earned and fee income remained stable at USD 9.5 billion. This includes the impact of unfavorable foreign-exchange rate movements and the termination of an intragroup retrocession agreement with Life Capital.
Corporate Solutions reported a net loss of USD 441 million and a combined ratio of 127.0%. The result was impacted by the decisive management actions to reposition the business as announced on 31 July 2019 as well as medium-sized and large claims. Large man-made and natural catastrophe losses of approximately USD 290 million for the nine-month period include significant claims from Hurricane Dorian and the compulsory liquidation of Thomas Cook in the third quarter.
Net premiums earned increased by 7.6% to USD 3.1 billion, as growth in property and credit lines and rate increases more than offset the impact from active pruning of several underwriting portfolios. Corporate Solutions is making progress in actively reducing risk exposure in specific lines of business to ensure a more focused and profitable portfolio going forward. Swiss Re expects the positive momentum in commercial insurance rates to continue after achieving a broad-based 10% price quality increase in the first nine months of 2019.
Life Capital reported net income of USD 40 million in the first nine months of the year, benefitting from strong performance of the closed books, partly offset by expenses from investments in growth of the open book businesses. The gross cash generation of USD 831 million was bolstered by the sale of subordinated bonds issued by ReAssure and proceeds from the sale of a 10% stake in ReAssure to MS&AD Insurance Group Holding Inc., partially offset by significant unfavorable impacts from market movements and the ReAssure recapitalization.
Net premiums earned and fee income rose to USD 1.6 billion, driven by growth in the open book businesses and changes to intragroup retrocessions. Gross premiums written of the open books increased 21% year-on-year when measured at constant exchange rates.
Christian MUMENTHALER, Group Chief Executive Officer of Swiss Re, said:
"So far in 2019 we have seen severe storms in both the Atlantic and the Pacific, causing heavy damage to local communities. Our deepest sympathies go to all those affected by disasters. They act as a constant reminder of the need to have access to effective insurance protection around the world. We continue to focus on fostering partnerships to develop affordable, innovative, technology-based solutions that help close protection gaps, leverage our risk expertise and tap into new sources of growth."
John DACEY, Group Chief Financial Officer of Swiss Re, added:
"The Group's results in the first nine months underline the strength of our franchise. Despite multiple large natural catastrophe and man-made claims affecting the business, our capital position remains very strong, allowing us to take advantage of growth opportunities in an improving pricing environment."
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