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Investing.com -- Swiss Re (SIX:SRENH) on Friday stronger-than-expected results in Q1, showcasing strength amid major natural catastrophe losses.
The insurance company’s property and casualty reinsurance segment absorbed $570 million in nat cat claims, well above its seasonal budget of $363 million.
However, this was still 20% below consensus estimates, contributing to a group-wide performance that beat overall expectations by 36%.
The Los Angeles wildfires were the quarter’s most significant event, generating $587 million in losses.
Of that, $537 million impacted property and casualty reinsurance, while $50 million hit Corporate Solutions.
These losses remained within the company’s guidance cap of $700 million. Outside of the California wildfires, analysts at Jefferies described the quarter as “unusually benign.”
Swiss Re also benefited from positive claims experience in life and health reinsurance, although this was partially offset by more conservative assumptions around onerous business.
A lower-than-expected tax rate of 14% and a $144 million disposal gain from Definity further supported earnings.
Group-level insurance revenue missed consensus by 13.2%, but the investment result exceeded expectations by 15%.
Return on investment stood at 4.4%, 0.3 percentage points above forecast. Net income came in 35.9% higher than expected, and the Swiss Solvency Test ratio reached 254%, two points above consensus.
The property and casualty reinsurance segment reported insurance revenue 13.9% below estimates, but its combined ratio of 86.0% outperformed by 2.5 percentage points.
While natural catastrophe losses were better than feared, man-made losses rose to $140 million, nearly double the five-year average of $75 million.
Corporate Solutions saw a 6.7% shortfall in insurance revenue but delivered a better-than-expected combined ratio of 88.4% and discounting of 4%, 1 percentage point ahead of forecasts.
Life and health reinsurance experienced a 16.3% revenue miss but still exceeded net income expectations by 6.8%, aided by favorable claims experience.