Swiss Re increases net income to USD 3.2 billion and delivers a 22% ROE for 2023

16 February 2024 — Daniela GHETU
Swiss Re increased net income to USD 3.2 billion in 2023, with a net income of USD 748 million in Q4 and delivered a return on equity (ROE) of 22.3% for the full year. For 2024, the Group targets a net income of more than USD 3.6 billion under IFRS.

Swiss Re's Group Chief Executive Officer Christian MUMENTHALER said: "Swiss Re can look back on a successful 2023. We achieved all our financial targets in a year that was characterized by geopolitical turbulence and continued economic uncertainty. Improved price adequacy in our property and casualty businesses following strong renewals and our underwriting discipline helped us to manage elevated industry losses from natural catastrophes, while L&H Re achieved a solid result, benefitting from active in-force portfolio management and a strong investment performance."

Swiss Re's Group Chief Financial Officer John DACEY said: "Our businesses are well positioned to benefit from the current market environment, while the higher interest rate environment supports recurring investment income. This positive earnings momentum gives us confidence to increase the pay-out to investors by proposing a 6% higher ordinary dividend of USD 6.80 per share for 2023."

Group result benefits from an attractive market environment and strong underwriting discipline

Swiss Re reported a net income of USD 3.2 billion and an ROE of 22.3% for the full-year 2023, compared with a net income of USD 472 million and a ROE of 2.6% in the previous year. The result was supported by improved underwriting margins while higher interest rates drove an increase in investment income.

Net premiums earned and fee income for the Group rose 4.4% to USD 45.0 billion in 2023, compared with USD 43.1 billion in the previous year. At constant foreign exchange rates, net premiums earned and fee income increased by 4.9%.

Substantially higher recurring investment income and strong capital position

Swiss Re's ROI for the full year increased materially to 3.4% from 2.0% in 2022. The recurring income yield increased to 3.6% for 2023 from 2.6% in the previous year, benefitting from reinvestments in the higher interest rate environment. In the fourth quarter, the recurring income yield rose to 3.9%, while the reinvestment yield reached 5.0%.

Swiss Re's capital position continued to be strong, supported by solid earnings and the benefit of higher interest rates. As a result, the Group Swiss Solvency Test (SST) ratio remained above the 200–250% target range as of 1 January 2024.

P&C Re delivers solid result

P&C Re reported a net income of USD 1.9 billion for 2023, compared with USD 312 million in the previous year. The solid result was primarily driven by a resilient underwriting performance and disciplined renewals. Strong margins and positive reserve developments in property and speciality lines helped offset reserve strengthening in the casualty business. In addition, the result was supported by a solid investment performance.

Large natural catastrophe claims amounted to USD 1.3 billion in 20232, below the full-year budget of USD 1.7 billion. These claims included the earthquake in Turkey and Syria at the beginning of the year, Hurricane Otis in Mexico in the fourth quarter as well as several storms and consequent flooding in Europe throughout the year. Net premiums earned increased 3.9% to USD 22.9 billion in 2023 compared with the previous year. At constant foreign exchange rates, net premiums earned increased by 4.3%.

The reported P&C Re combined ratio was 94.8%1 for the full year, meeting the target of less than 95%.

January P&C Re renewals

P&C Re renewed treaty contracts resulting in USD 13.1 billion in premium volume on 1 January 2024. This represents a 9% volume increase compared with the business that was up for renewal. Overall, P&C Re achieved a price increase of 9% in this renewal round. Based on a prudent view on inflation and updated loss models, loss assumptions increased by 11%. The resulting portfolio quality is consistent with the Group's 2024 financial targets.

L&H Re achieves net income target

L&H Re reported a net income of USD 976 million for 2023, compared with USD 416 million in the previous year, and above the targeted net income of USD 900 million. The underlying result benefited from active in-force portfolio management and a strong investment result, which offset elevated mortality claims in the US.

Net premiums earned and fee income increased 4.4% to USD 15.6 billion in 2023 compared with the previous year, driven by large transactions written across regions. At constant foreign exchange rates, net premiums earned, and fee income increased by 5.6%.

Corporate Solutions delivers another year of strong performance

Corporate Solutions reported a net income of USD 678 million in 2023, compared with USD 486 million in the previous year. The increase reflects a steadily improved portfolio resilience, driven by disciplined underwriting and portfolio steering. Corporate Solutions' performance also benefited from a higher investment result.

Net premiums earned remained stable at USD 5.5 billion in 2023 compared with the previous year. At constant foreign exchange rates and excluding the elipsLife business sold in mid-2022, net premiums earned increased by 7.3%, driven by new business mainly in property, credit & surety as well as in accident & health, partially offset by conscious reductions in professional liability lines.

The reported Corporate Solutions combined ratio was 91.7%1 for the full year, outperforming the target of less than 94% for 2023.



iptiQ increases gross premiums written

iptiQ continued to grow its business in 2023, increasing its in-force policies to 2.7 million from 2.2 million in the previous year. Gross premiums written increased 29.3% year-on-year to USD 1.1 billion in 2023. At constant foreign exchange rates, gross premiums written increased by 28.1%.

iptiQ reported a loss before interest and tax of USD 247 million in 2023, compared with a loss of USD 362 million in 2022.

Financial targets and outlook

Swiss Re confirms the financial targets communicated at Investors' Day in December 2023. For 2024, the Group targets a net income of more than USD 3.6 billion under IFRS, while L&H Re targets a net income of USD 1.5 billion. P&C Re targets an IFRS reported combined ratio of less than 87% for 2024. Corporate Solutions targets an IFRS reported combined ratio of less than 93%. Swiss Re targets a multi-year IFRS ROE of more than 14%.

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said: "In 2024, we continue to put emphasis on underwriting discipline as evidenced in the successful January renewals. Our focus on costs and strengthening proximity to our clients also remains paramount. Finally, the accounting transition from US GAAP to IFRS will be beneficial to our earnings and reported balance sheet strength."

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