Reinsurance continues to be Swiss Re's key earnings contributor. P&C Re is focused on expanding underwriting margins, partly to offset the negative impacts of lower interest rates. P&C Re is expected to improve its normalised combined ratio to less than or equal to 96% in 2021. L&H Re has achieved strong new business generation, in particular in Asia.
Decisive execution of the management actions announced in 2019 is fuelling the successful turnaround of Corporate Solutions, with the business confident of achieving a normalised combined ratio that is less than or equal to its 98% target in 2021. A pronounced hard market offers opportunities for profitable growth in areas where Corporate Solutions has a proven competitive advantage. Over the medium term, Corporate Solutions aims to move towards a better diversified and more cycle-resilient commercial insurance model, which provides complementary access to corporate clients, Swiss Re mentioned.
Its proactive portfolio of assets management has helped Swiss Re navigate the market volatility in 2020. The Group's return on investment (ROI) has remained strong despite the low interest rate environment, supported by Swiss Re's commitment to Environmental, Social and Governance (ESG) principles. The defensive portfolio positioning, combined with the significantly reduced financial market risk profile of the Group after the sale of ReAssure, provides opportunities to enhance investment yields going forward.
Christian Mumenthaler, Swiss Re Group Chief Executive Officer, said:
"We are optimistic on the outlook for all of our businesses as we see positive momentum in the underlying earnings power of the Group. Our confidence is underpinned by Swiss Re's capital strength and the proactive approach we have taken to the Group's COVID-19 reserves. We expect that COVID-19 will remain an earnings and not a capital event for the Group, with declining exposures going forward. We are focused on delivering on our financial targets and capital management priorities. At the same time, our strategy positions Swiss Re for long-term success."