Swiss Re FY23 Profit Surges, Ups Dividend, Confirms Outlook; Stock Down

(RTTNews) - Swiss Re Ltd. reported Friday significantly higher profit in its fiscal 2023, supported by improved underwriting margins and an increase in investment income with higher interest rates. Net premiums earned and fee income were higher than last year. Further, the company lifted its dividend, and confirmed forecast for higher earnings in fiscal 2024.

In Switzerland, Swiss Re shares were losing around 2.4 percent to trade at 101.15 Swiss Francs.

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said, "We achieved all our financial targets in a year that was characterised by geopolitical turbulence and continued economic uncertainty. … In 2024, we continue to put emphasis on underwriting discipline as evidenced in the successful January renewals. Our focus on costs and strengthening proximity to our clients also remains paramount. Finally, the accounting transition from US GAAP to IFRS will be beneficial to our earnings and reported balance sheet strength."

For 2024, Swiss Re continues to expect net income of more than $3.6 billion under IFRS, higher than the previous year.

Life & Health Reinsurance or L&H Re targets a net income of $1.5 billion. P&C Re targets an IFRS reported combined ratio of less than 87 percent for 2024, while Corporate Solutions targets an IFRS reported combined ratio of less than 93 percent.

Further, the company said its Board of Directors will propose a dividend increase of 6 percent to $6.80 per share at the Annual General Meeting on April 12.

For fiscal 2023, net income surged to $3.21 billion from last year's $472 million. In the fourth quarter, net income was $748 million.

Property & Casualty Reinsurance or P&C Re net income surged to $1.9 billion from last year's $312 million. The company noted that strong margins and positive reserve developments in property and speciality lines helped offset reserve strengthening in the casualty business.

L&H Re's net income climbed to $976 million from $416 million in the previous year. Corporate Solutions reported a net income of $678 million in 2023, compared with $486 million in the previous year.

Swiss Re's full-year net premiums earned and fee income rose 4.4 percent to $45.00 billion from last year's $43.12 billion. At constant foreign exchange rates, net premiums earned and fee income increased 4.9 percent.

P&C Re's net premiums earned grew to $22.88 billion from last year's $22.03 billion. The segment increased premium volume by 9 percent in the January 2024 renewals and achieved price increases of 9 percent.

L&H Re Net premiums earned and fee income increased 4.4 percent to $15.65 billion in 2023, driven by large transactions written across regions. At constant foreign exchange rates, net premiums earned and fee income increased 5.6 percent.

L&H Re achieved a solid result, benefitting from active in-force portfolio management and a strong investment performance, the company noted.

Corporate Solutions net premiums earned remained stable at $5.48 billion in 2023. At constant foreign exchange rates and excluding the elipsLife business sold in mid-2022, net premiums earned increased 7.3 percent.

Swiss Re's ROI for the full year increased materially to 3.4 percent from 2.0 percent in 2022. The recurring income yield increased to 3.6 percent for 2023 from 2.6 percent in the previous year.