Swiss Re reports a net income of USD 1.4 billion for the first half of 2023

Ad hoc announcement pursuant to Article 53 LR

• Property & Casualty Reinsurance (P&C Re) H1 2023 net income of USD 904 million; combined ratio of 94.7%¹
• Successful P&C Re July 2023 renewals
• Life & Health Reinsurance (L&H Re) H1 2023 net income of USD 393 million
• Corporate Solutions H1 2023 net income of USD 323 million; combined ratio of 91.0%¹
• Return on investments (ROI) of 2.8%
• Very strong Group SST ratio well above target range of 200–250%

Swiss Re reported a profit of USD 804 million in the second quarter of 2023, resulting in a net income of USD 1.4 billion and a return on equity (ROE) of 22.8% for the first half of the year. All businesses contributed to the solid result. Swiss Re maintains its guidance for full-year targets.

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said: "The overall result in the first half of 2023 reflects the good positioning of Swiss Re, as well as the quality of our new business. The performance of P&C Re and Corporate Solutions contributed to a solid second quarter."

Swiss Re's Group Chief Financial Officer John Dacey said: "In spite of macro-economic volatility, higher interest rates and steadily increasing recurring income contributed to an improved investment result. We have maintained our very strong capital position, which allows us to take advantage of attractive business opportunities."

Swiss Re reported a net income of USD 1.4 billion and an ROE of 22.8% for the first half of 2023, compared with a net income of USD 157 million and an ROE of 1.6% for the same period in 2022. Main drivers for this result were contained natural catastrophe losses in the first half of the year, L&H Re's performance returning to pre-pandemic levels and a strong result for Corporate Solutions.

Net premiums earned and fee income for the Group increased 4.4% to USD 22.1 billion, compared with USD 21.2 billion for the same period last year. At constant foreign exchange rates, net premiums earned and fee income grew by 6.6%.

The Group's return on investments stood at 2.8%, compared to 1.2% in the first half of last year. The ROI continues to benefit from higher income with the recurring income yield increasing to 3.3%, up from 2.6% for the full year 2022. Investments during the second quarter of 2023 contributed to an accretive fixed income reinvestment yield of 4.6%.

Swiss Re's capital position remained very strong, with the Group Swiss Solvency Test (SST) ratio well above the 200–250% target range.

P&C Re reported a net income of USD 904 million in the first half of 2023, compared with USD 316 million in the same period in 2022. This increase was driven by a solid investment result and low level of large natural catastrophe claims in the second quarter.

The large natural catastrophe losses of USD 634 million ² in the first half of 2023 relate to the earthquake in Turkey and Syria, Cyclone Gabrielle and flooding in New Zealand, all of which occurred in the first quarter. Large man-made losses amounted to USD 76 million in the first half of 2023.

Net premiums earned stood at USD 11.4 billion, up from USD 10.6 billion in the prior-year period, reflecting the strong performance during renewals in January and April. Net premiums earned grew by 9.6% at constant foreign exchange rates.

P&C Re's combined ratio for the first half of 2023 improved to 94.7%¹.

P&C Re renewed contracts with USD 4.3 billion in treaty premium volume on 1 July 2023. Overall, P&C Re achieved a price increase of 21% in this renewal round. This more than offset higher loss assumptions of 16%.

L&H Re reported a net income of USD 393 million in the first half of 2023, compared with a net income of USD 2 million for the same period in 2022. Compared to last year, L&H Re benefitted from much lower COVID-19 claims as well as from higher investment income. However, there was elevated mortality in the US from the winter months.

Net premiums earned and fee income increased slightly to USD 7.8 billion from USD 7.5 billion in the same period last year. Net premiums earned and fee income increased by 6.4% at constant foreign exchange rates.

L&H Re continues to target a net income of approximately USD 900 million for 2023.

Corporate Solutions reported a net income of USD 323 million for the first half of 2023, compared with USD 220 million in the prior-year period. This strong result was achieved despite increased man-made claims activity in the second quarter of 2023, confirming the improved resilience of the business and disciplined underwriting. In addition, Corporate Solutions benefitted from higher investment income.

Large man-made losses accounted for claims of USD 113 million in the first half of 2023, a lower amount than in the prior-year period, which was marked by a significant reserve for the war in Ukraine. Large natural catastrophe losses were also lower than in the same period last year, amounting to USD 20 million.

Net premiums earned decreased to USD 2.6 billion in the first half of 2023 from USD 2.9 billion in the prior-year period, reflecting the partial sale of the elipsLife business in mid-2022. At constant foreign exchange rates and excluding the impact of the elipsLife sale, the comparative increase was 3.9%, driven by new business growth in selected focus portfolios, partially offset by conscious reductions in professional liability lines.

Corporate Solutions' combined ratio for the first half of 2023 improved to 91.0% ¹.

iptiQ grew in the second quarter, with gross premiums written of USD 476 million for the first half of 2023, up from USD 455 million in the prior-year period and now has approximately 2.2 million policies in force. iptiQ continues to focus on improving operational performance.

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said: "An increased risk awareness and rising interest rates are contributing to a strong market for our industry. As we enter the second half of the year, our transition to a simpler organisational structure, which we began implementing in April 2023, is well underway. Given the positive contribution of all our main businesses, we are focused on achieving our profit target of more than USD 3 billion for the year."

Details of H1 2023 performance

¹ The Group has prospectively, as from Q1 2023, revised the methodology used to calculate the combined ratio to include interest on funds withheld.
² Net of reinstatement premiums of USD 35 million.

Swiss Re will hold a virtual media conference this morning at 10:30 CEST. You can join the media conference via your computer or Teams mobile app here: Microsoft Teams Meeting. Alternatively, you can dial in (audio only) using the below numbers and conference ID:

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The Swiss Re Group is one of the world's leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk – from natural catastrophes to climate change, from ageing populations to cyber crime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally.

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