Swiss Re reports $3.9bn of COVID, $1.7bn of catastrophe losses in 2020

Swiss Re reports $3.9bn of COVID, $1.7bn of catastrophe losses in 2020

Swiss Res Group Chief Executive Officer Christian Mumenthaler commented, “The COVID-19 pandemic continues to impact neighborhoods and businesses throughout the world. I am really encouraged by broad- based improvements in portfolio quality and underwriting margins in P&C Re and Corporate Solutions, consisting of in the January renewals.”
Swiss Res Group Chief Financial Officer John Dacey included, “Our capital position remained really strong throughout 2020, in spite of the unmatched effect from COVID-19 and an abnormally high frequency of natural disasters. Swiss Res companies continued to run without disturbances, delivering a strong underlying efficiency. We look forward to enhancing success in the P&C Re organization as an outcome of our focus on portfolio quality and the favourable market environment.

Worldwide reinsurance giant Swiss Re reported its full-year 2020 results this early morning, highlighting $3.9 billion of losses from the COVID-19 pandemic and $1.7 billion from what it called a greater frequency of natural catastrophe events.Swiss Re likewise supplied a projection for an even more as much as $500 million of pandemic associated claims in 2021, recommending it believes its overall COVID-19 claims and reserves by the end of this year might be $4.4 billion.
Ultimately, the losses and claims drove Swiss Re to a bottom line of $878m for 2020.
But leaving out the effect of COVID-19, the results tell a different photo, with group earnings coming out at $2.2 billion for 2020, well up on 2019s $727m.
Property and casualty reinsurance underwriting saw a bottom line of $243m, but excluding COVID a net profit of $1.3 billion and return on equity of 13.2%.
The reinsurer kept in mind small cost increases of 6.5% accomplished throughout its January renewal book in P&C reinsurance, while it stated that a concentrate on portfolio quality suggests it now has a lower combined ratio target of less than 95% for 2021.
The Corporate Solutions service would also have been positive absent losses from the pandemic, with earnings of $393m and an RoE of 16.5%, which is a much enhanced result for Swiss Re because essential industrial danger underwriting segment.
Swiss Res Group Chief Executive Officer Christian Mumenthaler commented, “The COVID-19 pandemic continues to impact communities and companies around the world. The start of vaccination efforts brings hope that the scenario will improve quickly. Our Group has gone through this crisis with self-confidence and strength, and in our function as a shock absorber we are doing our part to help mitigate the difficulties of the pandemic and enhance durability to future systemic dangers.
” From the start of the pandemic, we took a disciplined and sensible method to structure reserves as actual claims have been sluggish to come in. While some more COVID-19 losses are expected in 2021, we have considerably lowered relevant exposures in P&C lines. I am very motivated by broad- based improvements in portfolio quality and underwriting margins in P&C Re and Corporate Solutions, consisting of in the January renewals.”
While Swiss Re forecasts $500m of extra COVID-19 pandemic claims for 2021, it does keep in mind the high degree of unpredictability in this figure.
Swiss Res Group Chief Financial Officer John Dacey included, “Our capital position remained very strong throughout 2020, in spite of the extraordinary effect from COVID-19 and an unusually high frequency of natural disasters. Swiss Res organizations continued to run without disturbances, providing a strong underlying efficiency. Together with a favorable outlook, this enables us to propose a stable dividend payment to our investors even in these challenging times.”
The P&C reinsurance result of $1.3 billion, excluding COVID impacts, is well up on 2019s $396m.
Natural disaster losses of $1.7 billion were mainly driven bu the US typhoons, and numerous occasions from so-called secondary dangers around the globe, Swiss Re stated.
Normalised, the combined ratio for P&C reinsurance came in under target at 96.9%, the target was 97%. Consisting of the COVID-19 impacts, the P&C integrated ratio was 109%.
Interestingly, Swiss Re decreased its premium volumes at the essential January reinsurance renewals, restoring $7.8 billion of premiums, which is 11% down compared with the organization that was up for renewal.
The reinsurer discussed that this is due to a focus on underwriting quality and improved conditions and terms, as Swiss Re tries to make its portfolio more resilient for the year ahead.
The 6.5% of nominal cost increases across the P&C reinsurance book more than balanced out lower rate of interest and greater loss presumptions, Swiss Re said.
We look forward to improving success in the P&C Re service as an outcome of our focus on portfolio quality and the beneficial market environment. Our L&H Re client franchise is very strong, placing us to grow, especially through customized deals.

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