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Swiss Re reported that its property/casualty and financial services renewals in January 2002 “saw significant improvements in rates as well as terms and conditions across all lines of business.”
The company noted that “Overall the average increase in rates achieved has been above 15%. This is largely driven by price increases on treaty renewals of 11% and renewals of facultative corporate business, which, during the last quarter, have produced rate increases of approximately 35%. Renewals during the remainder of 2002 are expected to be at comparable levels. The strong 2002 renewal confirms Swiss Re’s confidence in future business growth and profitability.”
Swiss Re acknowledged that it too would suffer from the disastrous losses experienced last year, particularly Sept. 11. “Not only was it the insurance industry’s largest ever loss,” said the company’s announcement, but “it also impacted several lines of business and led to declines in capital markets which negatively affected investment performance. The extraordinary nature of the event and the complexity of losses involved has led to uncertainties and revision of loss estimates throughout the insurance industry. As a result of a 9.9% increase in the USD gross loss estimate, reductions in recovery assumptions and movement of foreign exchange rates Swiss Re’s loss estimate arising out of 11 September is CHF 2.95 billion [ $1.75 billion] after retrocession and tax. Swiss Re will utilise approximately CHF 1 billion [$ 593 million] from its equalisation reserves to absorb part of this loss.
Swiss Re said that when it reports its 2001 results on April 10 It expects “to report a small loss” in the $120 million range. It also indicated that it expected to continue to be in a position, as a triple A rated company, to profit from a pronounced “flight to quality,” which would generate increased premiums and concluded that it expected to see “a sharp increase in earnings for 2002.”|”swiss, re, reports, renewal, rate, increases,, expects, 2001, loss