Swiss Re has reported a net profit of $83m for the second quarter of 2012. The result is impacted by the sale at a loss of $1bn of the Admin Re US business. Property & Casualty Reinsurance delivered a strong result while Life & Health Reinsurance net income benefited from realised gains.
Premiums earned and fee income increased by 13.7% to $6.1bn. Swiss Re Group's combined ratio was 85.7 (81.4). The group's performance was supported by a very good investment result. Investment income was $1.2bn with a Group return on investment of 4.5%.
Shareholders’ equity remained largely stable at £31bn($31.2bn) at the end of Q1 2012). Dividends paid to shareholders ($1.1bn) were mostly offset by unrealised gains. Group return on equity was 1.1% (vs. 15.6%); excluding the Admin Re US sale, it would have been 14.5% for Q2 2012.
Net income in Property & Casualty Reinsurance was $717m($385m). This result was helped by low losses from natural catastrophes in the quarter, reserve releases and net investment gains. Premiums earned were USD 2.8 billion, an increase of 18.2% Sucessful renewals in the first half of the year contributed to this very strong growth. The combined ratio was 81.0 (vs. 78.1). Adjusting for natural catastrophes and reserve releases, the underlying combined ratio for Q2 2012 was 94.6, in line with expectations.
Life & Health Reinsurance delivered net income of $248m($525m). Although the result benefited from realised gains on investments, the cost of claims was significantly higher.
The result also reflects lower investment income, a continuation of the negative performance of business written in the Americas prior to 2004 and slightly higher expenses due to strategic initiatives, especially in the Health area. Consequently, the operating result was lower than expected. Premium and fee income slightly increased to $2.2bn($2.1bn).
Michel M. Liès, group ceo comments "We have delivered a profit in the second quarter. Given the impact from the sale of the Admin Re US business, this shows the strength and resilience of our underlying earnings power. With another successful renewal round in July behind us, we will continue to focus on implementing our strategy and capturing growth opportunities in developed and high-growth markets in the second half of the year."
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