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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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.