Tough times at Swiss Re, but the insurance giant seems confident that there will be better news later in the year;
Swiss Re reported a net loss of USD 248 million for the first quarter of 2022, impacted by the war in Ukraine, heightened financial market volatility and the ongoing COVID-19 pandemic. Despite these headwinds, Swiss Re remains focused on achieving its financial targets for 2022.
Swiss Re’s Group Chief Executive Officer Christian Mumenthaler said:
“The first quarter turned out to be a challenging one. Russia’s invasion of Ukraine came as a shock, and our thoughts are with everyone impacted. While the situation remains highly uncertain and we do not believe we have an outsized exposure, we decided to take a proactive and cautious approach to establishing reserves for potential impacts from the war. Despite this and other headwinds in the quarter, Swiss Re’s property and casualty businesses delivered robust underwriting results, and we remain focused on delivering on our financial targets for the year.”
Swiss Re’s Group Chief Financial Officer John Dacey said: “While the first quarter was impacted by negative equity mark-to-market movements, the recurring income yield remained stable at 2.1%. We expect our investment results to benefit from rising interest rates in the medium term. At the same time, the Group maintained its very strong capital position, enabling us to capture profitable growth opportunities in a supportive pricing environment.”
Group results reflect headwinds
Swiss Re reported a net loss of USD 248 million and an ROE of –4.6% for the first quarter of 2022, compared with a net income of USD 333 million and an ROE of 5.2% for the same period last year. The Group absorbed higher-than-expected large natural catastrophe claims of USD 524 million across its property and casualty businesses as well as COVID-19 claims of USD 515 million. In addition, Swiss Re booked USD 283 million in reserves related to the war in Ukraine.
At the same time, Swiss Re continued to grow net premiums earned and fee income for the Group, increasing it by 4.0% compared with the prior-year period to USD 10.6 billion in the first quarter of 2022.
Swiss Re’s return on investments of 0.7% was impacted by equity mark-to-market losses as well as modest losses on Russia-related exposures. The recurring income yield of 2.1% demonstrates the quality and stability of the underlying asset portfolio.
Swiss Re’s capital position remained very strong, with the Group Swiss Solvency Test (SST) ratio in the upper half of the 200–250% target range as of 1 April 2022.