SWISS RE LTD First Quarter 2024 Results
Swiss Re investor and analyst presentation
Zurich, 16 May 2024
Strong Q1 2024 results, focus on achieving full-year financial targets
Swiss Re Group
Q1 2024 | FY 2024 |
key figures | targets |
Net income
(USD m)
1 092
P&C | Combined ratio1 | 84.7% | <87% |
Reinsurance | |||
Corporate | Combined ratio2 | 89.9% | <93% |
Solutions | |||
Q1 2024
Return on | 4.0% |
investments | |
L&H | Net income (USD) | 412m | ~1.5bn |
Reinsurance | |||
Swiss Re | Net income (USD) | 1 092m | >3.6bn |
Group | |||
1 | - Insurance service expense (net) / insurance revenue (net) | First Quarter 2024 Results | 2 |
2 | - (Insurance service expense (gross) + reinsurance result + non-directly attributable expenses) / insurance revenue (gross) | ||
Favourable contributions from insurance and investment activities
Insurance revenue (USD bn)
New business CSM (USD bn) | Group net income (USD bn) |
11.7 | |
5.0 | P&C Reinsurance |
4.8 | L&H Reinsurance |
1.8 | Corporate Solutions |
Group items | |
Consolidation |
1.8
1.4 |
0.4 |
P&C Reinsurance
L&H Reinsurance
Corporate Solutions
Group Items
1.4 | Insurance service result |
1.1 | |
1.1 | Investment result |
-0.6 | Insurance finance result |
-0.8 | Financing costs, taxes & other1 |
Q1 2024 |
- Insurance revenue supported by strong margins across both P&C businesses
- L&H Re's contribution reflects accelerated earnings recognition and reset of best estimate liabilities under IFRS 17
Q1 2024
- New business CSM driven by P&C Re, given attractive margins achieved at January 2024 renewals, and robust contribution from L&H Re
- Corporate Solutions impacted by seasonality of reinsurance program, which largely incepts in Q1, while new business incepts throughout the year
Q1 2024 |
- Q1 2024 result reflects continued underwriting discipline, improved price adequacy in both P&C businesses, a strong investment return, and effective management of operating expenses
1 Including other income/expenses | First Quarter 2024 Results | 3 |
Financial highlights
First Quarter 2024 Results | 4 |
Key figures Q1 2024
Corporate | Total | ||||||||||||
USD m, unless otherwise stated | P&C Re | L&H Re | Solutions | Group items | Consolidation | Q1 2024 | |||||||
• | Insurance revenue | 4 964 | 4 794 | 1 836 | 290 | - 208 | 11 676 | ||||||
• | Insurance service result | 704 | 434 | 213 | 1 | 1 352 | |||||||
Combined ratio | 84.7% | 89.9% | |||||||||||
• | Insurance finance result | ||||||||||||
- 353 | - 175 | - 72 | 1 | - 599 | |||||||||
• | Investment result | 701 | 409 | 145 | 66 | - 179 | 1 142 | ||||||
Return on investments | 3.9% | 4.7% | 4.2% | 2.0% | 4.0% | ||||||||
• | Net income/loss | ||||||||||||
552 | 412 | 194 | - 66 | 1 092 | |||||||||
• | Earnings per share | (USD) | |||||||||||
3.76 | |||||||||||||
(CHF) | 3.27 | ||||||||||||
• | Return on equity | 21.3% | |||||||||||
31 Mar 2024 | |||||||||||||
• | Contractual service margin | 2 461 | 19 109 | 554 | 112 | 22 236 | |||||||
• | Risk adjustment | 1 647 | 6 165 | 213 | 45 | 8 070 | |||||||
• | Shareholders' equity | ||||||||||||
21 140 | |||||||||||||
• | Book value per share | (USD) | 72.79 | ||||||||||
(CHF) | 65.64 | ||||||||||||
First Quarter 2024 Results | 5 |
P&C Reinsurance benefits from underwriting discipline and improved price adequacy
Insurance revenue (USD bn) New business CSM (USD m)
5.0 | 1 442 |
2.1 | Property |
1.9 | Casualty |
1.0 | Specialty |
Q1 2024 | Q1 2024 |
- Insurance revenue supported by strong price increases achieved at 2023 and January 2024 renewals
- Q1 2024 new business CSM primarily reflects outcome of January renewals, including impact of new business reserving uncertainty allowance
Insurance service result (USD m) | Combined ratio1 (%) |
84.7 | ||
4.9 | Expense ratio2 | |
704 | ||
953 | CSM release | |
79.8 | Loss and | |
commission ratio | ||
179 Changes in RA (current/past) | ||
-243 Experience variance & other | ||
-185 New business loss component | ||
Q1 2024 | Q1 2024 |
- Insurance service result driven by CSM release, supported by strong 2023 in-force margins. 'Experience variance & other' includes impact of benign nat cat activity3, offset by reserve additions for large prior-year nat cat and man-made events as well as for the pre-2020 US liability book. New business loss component reflects seasonality related to January renewals
- Combined ratio reflects discounting benefit of ~7%pts4
- - Insurance service expense (net) / insurance revenue (net)
- - Directly attributable expenses / insurance revenue (net)
3 | No large losses (i.e. USD >20m, nominal) related to events occurred in Q1 2024 vs. ~20% of FY 2024 budget of USD 1.8bn allocated to Q1 2024 | First Quarter 2024 Results | 6 |
4 | Discounting benefit on incurred claims |
P&C Reinsurance achieved strong nominal price increases in year-to-date renewals
Price change1 | +10% |
Higher loss assumptions | +12% |
USD bn | Premium volume change +8% |
14.3 | 1.8 | 15.4 | ||||
13.1 | 0.5 | |||||
-1.2 | ||||||
Up for | Cancelled / | Renewed | Change on | New business | Outcome | |
renewal YTD2 | Not placed | renewed | YTD renewals3 | |||
% of total | 100% | -8% | 92% | +4% | +13% | 108% |
Year-to-date renewals
- ~65% of treaty business renewed
- +8% premium volume change
- +10% price increase, with rate increases most pronounced in nat cat
- 12% higher loss assumptions reflect prudent view on inflation and loss model updates, particularly in casualty
- Improved portfolio quality and net price change of -2% consistent with 2024 combined ratio target of <87%
April renewals
- Premium volume of USD 2.5bn, +6% growth, whereof property and specialty +21%, and casualty -27%
- +12% price increase, +12% higher loss assumptions, 0% net price change
Note: figures are gross of external retro
- Price change defined as change in premiums net of commissions / claims; price change assumes constant portfolio mix and excludes discounting
- Delta to YTD 2023 outcome (as in Q1 2023 results presentation) reflects inclusion of deposit accounted contracts under IFRS 17 and multi-year deals that expired in
2024, restated at current FX | First Quarter 2024 Results | 7 |
3 Treaty business only; excluding facultative business (USD 1.1bn)
Year-to-date renewals feature targeted growth in property and specialty
Gross premium volume by line of business1 (USD bn) | Gross premium volume by region1 (USD bn) | ||||||
Up for | Premium | Outcome | Up for | Premium | Outcome | ||
renewal YTD | volume change | YTD renewals | renewal YTD | volume change | YTD renewals | ||
Nat cat | 2.7 | +12% | 3.0 | Americas | 5.1 | +2% | 5.2 |
Property2 | 2.6 | +18% | 3.1 | EMEA | 5.9 | +15% | 6.7 |
Specialty | 3.3 | +17% | 3.9 | Asia | 3.4 | +5% | 3.5 |
Casualty | 5.6 | -4% | 5.4 | Total | 14.3 | +8% | 15.4 |
Total | 14.3 | +8% | 15.4 |
- Nat cat: Increased premium driven by both volume and rate improvements, while discipline was maintained on attachment points
- Property2: Premium growth in EMEA and Asia
- Specialty: Volume growth supported by engineering, credit & surety and a large transaction
- Casualty: Lower volume due to targeted portfolio actions in the US, partially offset by structured motor transactions in EMEA
1 | Treaty business only | First Quarter 2024 Results | 8 |
2 | Excluding nat cat | ||
Corporate Solutions continues to generate strong underwriting results
Insurance revenue (USD bn) New business CSM (USD m)
Insurance service result (USD m) | Combined ratio1 (%) |
1.8 |
0.7 |
Property
287 Assumed |
213
89.9
25.0 Expense ratio2
0.7 |
0.4 |
-16
Casualty
Specialty
-303Ceded |
258
26
-71
CSM release
Changes in RA (current/past)
Experience variance, new business loss component & other
64.9 Loss ratio
Q1 2024 | Q1 2024 |
- Insurance revenue benefitting from good rate environment in most segments and new business growth
- New business CSM impacted by seasonality of reinsurance program, which largely incepted in Q1, while assumed business incepts throughout the year. Assumed business reflects robust new business generation
Q1 2024 | Q1 2024 |
- Insurance service result mainly driven by CSM release, reflecting strong in-force and new business margins. 'Experience variance, new business loss component & other' includes allowance for potential claims seasonality and initial recognition of onerous contracts
- Combined ratio reflects discounting benefit of ~4%pts3
1 - (Insurance service expense (gross) + reinsurance result + non-directly attributable expenses) / insurance revenue (gross)
2 | - (Directly attributable expenses + commissions + non-directly attributable expenses) / insurance revenue (gross) | First Quarter 2024 Results | 9 |
3 | Discounting benefit on incurred claims |
L&H Reinsurance with solid start to the year
Insurance revenue (USD bn) | New business CSM (USD m) |
4.8 | 392 |
Insurance service result1 (USD m) | Net income (USD m) |
434
423 |
142 |
-169 |
CSM release2
Changes in RA (current/past)3
Experience variance, new business loss component & other4
434 | Insurance service result |
412 | |
409 | Investment result |
-175 | Insurance finance result |
-256 | Financing costs, taxes & |
other5 | |
Q1 2024 | Q1 2024 |
Q1 2024
Q1 2024 |
- Insurance revenue supported mainly by strong contributions from mortality in the US, longevity and critical illness
- New business CSM driven by all regions, with the highest contribution from US mortality
-
Insurance service result driven by strong CSM release given large in-force book.
'Experience variance, new business loss component and other' includes mainly adverse experience variance in EMEA, while US mortality developed in line with expectations - Net income driven by solid underwriting result and strong recurring investment income
- Q1 2024 'Insurance service result' of USD 434m includes positive out of period adjustments of net USD 38m
- Q1 2024 'CSM release' of USD 423m excludes out of period adjustments of USD 146m
- Q1 2024 'Changes in RA' of USD 142m excludes out of period adjustments of USD -18m
4 | Q1 2024 'Experience variance, new business loss component & other' of USD -169m excludes out of period adjustments of USD -90m | First Quarter 2024 Results | 10 |
5 | Including other income/expenses |
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Disclaimer
Swiss Re Ltd. published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 05:03:02 UTC.
