Growth helped by benign natural catastrophe
Swiss Re reported an 11% rise in profit to $2.26bn (£1.45bn) for the first half of 2015, compared with $2.03bn in the same period last year.
The improvement came despite a 13.3% profit drop in the company’s property/casualty reinsurance division - its biggest unit.
Swiss Re’s property/casualty reinsurance profit fell to $1.3bn in the first half of 2015 from $1.5bn in last year’s first half.
The fall was driven by higher taxes, lower net realised gains compared with the prior-year period and market softening, partially offset by lower expenses.
The half-year property/casualty combined operating ratio also increased by 2.6 percentage points to 88.7% from 86.1% in 2014.
The reinsurer benefited from reserve releases and a lack of natural catastrophes, but it was still affected by price softening and changes in its business mix.
Premiums earned in the property/casualty business fell to $7.3bn to $7.4bn in H1 2014, largely because of foreign exchange movements. At constant exchange rates, earned premiums grew by 6%.
This was driven by premium growth in the Americas and Europe, Middle East and Africa, as well as fewer external retrocessions.
Although profit fell in Swiss Re’s property/casualty division, the reinsuer’s other three divisions all enjoyed an increase in profits in the first half of 2015..
The life and health reinsurance division more than quadrupled its profit to $495m from $112m.
Swiss Re said the improvement reflected a good operating result, combined with higher net realised gains and a positive foreign exchange impact.
The Corporate Solutions arm generated profits of $239m in the first six months of 2015, a 63.7% increase on 2014’s $146m. This was driven by improved performance across most lines of business and net realised gains and absence of natural catastrophes.
The Admin Re division achieved profits of $249m in the first half of 2015 ($165m in 2014). The increase was driven by higher gains from sales of fixed income securities as part of the preparation for Solvency II and tax credits following the finalisation of the UK year-end statutory results.
Group chief financial officer David Cole said: “In a continued volatile capital markets and challenging pricing environment, we were able to leverage our differentiated product and service offering in combination with our global scale to help our clients succeed.
“This is reflected in this solid set of figures. Despite the ongoing uncertainty about overall economic growth in many areas of the world — as shown by continued historically low interest rates — we were able to support our underwriting expertise with a strong investment result.”