Reinsurer says it has restored its capital base
Swiss Re turned last year’s Q3 net loss of CHF 304m into a net income of CHF334m and said its estimated excess capital at AA level improved to more than CHF6bn.
Stefan Lippe, Swiss Re’s chief executive officer, said: “During the third quarter of 2009, we continued to improve Swiss Re’s financial flexibility through a combination of strong underlying performance in our core business and continued de-risking of the Legacy activities.
“During the first nine months of 2009, our excess capital at the AA level improved to over CHF 6 billion. Our excess capital is substantial and allows us to support our clients when they need us most.”
Net income was hit by mark-to-market losses of CHF706m on the corporate bond hedges and by impairments of CHF263m, mainly in the securitised products portfolio.
P&C sector
Property & Casualty operating income increased to CHF998m compared to CHF685m last year. The combined ratio improved to 84.5% (or 82.7% excluding unwind of discount), compared to 99.6% (97.4%).
Swiss Re said: “This excellent result is partly driven by low levels of natural catastrophes in the quarter, but it is also a testament to the success of Swiss Re’s continued disciplined underwriting.
Outlook
Lippe said: “The outlook for our company is encouraging. In the first nine months of 2009, we restored our capital position. Our underlying performance remains very strong and we have achieved significant progress in de-risking our Legacy portfolio.
“The excellent underwriting results, which we have consistently delivered over many years, demonstrate our disciplined underwriting approach.”
“Our focus now is on the January renewals. While the market fundamentals point towards higher prices, restored industry capital and the absence of hurricanes may partially delay the market correction. With our very profitable reinsurance portfolio and proven underwriting track record, we are well placed for the upcoming renewal season.”
