Unlike its German rival (see following story) Swiss Re posted a significant first half-earnings increase to CHF 691 million ($490 million), compared to CHF 118 million ($83.6 million) in the same period of 2002. Total premiums earned increased to CHF 14.382 billion ($10.2 billion), a 4% increase on 2002 or 19% if calculated in original currency values.
“The benefits of the hard market were realised both in Property & Casualty, with profits of CHF 822 million [$582.5 million] and 99.8% combined ratio,” said the company’s announcement. It also noted that it made a CHF 273 million ($193.5 million) profit from financial services, compared to a CHF 379 million ($269 million) loss in 1st half 2002. Shareholders’ equity increased by CHF 1.2 billion ($850 million) in the first six months of 2003 to CHF 17.9 billion ($12.7 billion). The report also indicated that the company had “produced a strong investment result in challenging market conditions, with an annualised return of 4.8%, despite absorbing CHF 682 million [$483.5 million] of impairment charges.”
Swiss Re noted that the general improvement in its business “was achieved despite the Swiss franc appreciating 18% against the US dollar,” and that “all three business groups contributed to the strong performance.” CEO John Coomber, commented, “We are pleased with our strong performance in the first half of 2003. Swiss Re expects the hard market to continue and with our focus firmly on profitable technical underwriting, our results should see ongoing improvement.”
P/C results were especially good with operating income increasing to CHF 822 million ($582.6 million) compared with CHF 104 million ($73.7 million) in the first half 2002. “The business group is harvesting the benefits of the hard market,” said the bulletin, “and has increased premium income by 18% to CHF 7 864 million [$5.57 billion]. In original currencies the increase was 33%. Swiss Re remained committed to strengthening the quality of its book during the 2003 renewals. As a result, the combined ratio improved further to 99.8%, meeting the 2003 annual target at the half year point.”
The company’s Life & Health’s operating income was CHF 472 million ($334.5 million) in the first half, a decrease from the CHF 895 million ($634.3 million) compared to the first half of 2002. “Total return on operating revenues was 8.1%,” said the bulletin. It explained that the “result reflects improved life returns, the absence of last year’s one-off health gains and the impact of the 18% decline in the US dollar against the Swiss franc.”
Swiss Re noted that “The hard market conditions in non-life are set to continue,” and indicated that “opportunities for Life & Health’s Admin ReSM product are also increasing. The recent signing of the first transaction in the United Kingdom represents an important milestone in the expansion of the Admin ReSM business outside the United States. Overall, Swiss Re’s business fundamentals are excellent and continued improvements in operating performance are expected across the Group for the full year.”
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