Swiss Re increases net income to USD 3.2 billion and delivers a 22% ROE for 2023

Ad hoc announcement pursuant to Article 53 LR

• Property & Casualty Reinsurance (P&C Re) net income of USD 1.9 billion; combined ratio of 94.8%¹
• Life & Health Reinsurance (L&H Re) net income of USD 976 million
• Corporate Solutions net income of USD 678 million; combined ratio of 91.7%¹
• Return on investments (ROI) of 3.4%; recurring income yield increased to 3.9% in the fourth quarter
• P&C Re increased premium volume by 9% in the January 2024 renewals and achieved price increases of 9%
• Strong capital position with a Group Swiss Solvency Test (SST) ratio above the target range as of 1 January 2024
• Board of Directors to propose a dividend increase of 6% to USD 6.80 per share at the Annual General Meeting on 12 April 2024
• Swiss Re targets Group net income under IFRS of more than USD 3.6 billion in 2024

Zurich, 16 February 2024 – Swiss Re increased net income to USD 3.2 billion in 2023, with a net income of USD 748 million in the fourth quarter, and delivered a return on equity (ROE) of 22.3% for the full year. Based on Swiss Re's improved profitability, the Board of Directors will propose an increased dividend of USD 6.80 per share. For 2024, the Group targets a net income of more than USD 3.6 billion under IFRS.

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said: "Swiss Re can look back on a successful 2023. We achieved all our financial targets in a year that was characterised by geopolitical turbulence and continued economic uncertainty. Improved price adequacy in our property and casualty businesses following strong renewals and our underwriting discipline helped us to manage elevated industry losses from natural catastrophes, while L&H Re achieved a solid result, benefitting from active in-force portfolio management and a strong investment performance."

Swiss Re's Group Chief Financial Officer John Dacey said: "Our businesses are well positioned to benefit from the current market environment, while the higher interest rate environment supports recurring investment income. This positive earnings momentum gives us confidence to increase the pay-out to investors by proposing a 6% higher ordinary dividend of USD 6.80 per share for 2023."

Group result benefits from an attractive market environment and strong underwriting discipline

Swiss Re reported a net income of USD 3.2 billion and an ROE of 22.3% for the full-year 2023, compared with a net income of USD 472 million and a ROE of 2.6% in the previous year. The result was supported by improved underwriting margins while higher interest rates drove an increase in investment income.

Net premiums earned and fee income for the Group rose 4.4% to USD 45.0 billion in 2023, compared with USD 43.1 billion in the previous year. At constant foreign exchange rates, net premiums earned and fee income increased by 4.9%.

Substantially higher recurring investment income and strong capital position

Swiss Re's ROI for the full year increased materially to 3.4% from 2.0% in 2022. The recurring income yield increased to 3.6% for 2023 from 2.6% in the previous year, benefitting from reinvestments in the higher interest rate environment. In the fourth quarter, the recurring income yield rose to 3.9%, while the reinvestment yield reached 5.0%.

Swiss Re's capital position continued to be strong, supported by solid earnings and the benefit of higher interest rates. As a result, the Group Swiss Solvency Test (SST) ratio remained above the 200–250% target range as of 1 January 2024.

P&C Re delivers solid result

P&C Re reported a net income of USD 1.9 billion for 2023, compared with USD 312 million in the previous year. The solid result was primarily driven by a resilient underwriting performance and disciplined renewals. Strong margins and positive reserve developments in property and speciality lines helped offset reserve strengthening in the casualty business. In addition, the result was supported by a solid investment performance.

Large natural catastrophe claims amounted to USD 1.3 billion in 2023², below the full-year budget of USD 1.7 billion. These claims included the earthquake in Turkey and Syria at the beginning of the year, Hurricane Otis in Mexico in the fourth quarter as well as several storms and consequent flooding in Europe throughout the year. Net premiums earned increased 3.9% to USD 22.9 billion in 2023 compared with the previous year. At constant foreign exchange rates, net premiums earned increased by 4.3%.

The reported P&C Re combined ratio was 94.8%¹ for the full year, meeting the target of less than 95%.

January P&C Re renewals

P&C Re renewed treaty contracts resulting in USD 13.1 billion in premium volume on 1 January 2024. This represents a 9% volume increase compared with the business that was up for renewal. Overall, P&C Re achieved a price increase of 9% in this renewal round. Based on a prudent view on inflation and updated loss models, loss assumptions increased by 11%. The resulting portfolio quality is consistent with the Group's 2024 financial targets.

L&H Re achieves net income target

L&H Re reported a net income of USD 976 million for 2023, compared with USD 416 million in the previous year, and above the targeted net income of USD 900 million. The underlying result benefitted from active in-force portfolio management and a strong investment result, which offset elevated mortality claims in the US.

Net premiums earned and fee income increased 4.4% to USD 15.6 billion in 2023 compared with the previous year, driven by large transactions written across regions. At constant foreign exchange rates, net premiums earned and fee income increased by 5.6%.

Corporate Solutions delivers another year of strong performance

Corporate Solutions reported a net income of USD 678 million in 2023, compared with USD 486 million in the previous year. The increase reflects a steadily improved portfolio resilience, driven by disciplined underwriting and portfolio steering. Corporate Solutions' performance also benefitted from a higher investment result.

Net premiums earned remained stable at USD 5.5 billion in 2023 compared with the previous year. At constant foreign exchange rates and excluding the elipsLife business sold in mid-2022, net premiums earned increased by 7.3%, driven by new business mainly in property, credit & surety as well as in accident & health, partially offset by conscious reductions in professional liability lines.

The reported Corporate Solutions combined ratio was 91.7%¹ for the full year, outperforming the target of less than 94% for 2023.

iptiQ increases gross premiums written

iptiQ continued to grow its business in 2023, increasing its in-force policies to 2.7 million from 2.2 million in the previous year. Gross premiums written increased 29.3% year-on-year to USD 1.1 billion in 2023. At constant foreign exchange rates, gross premiums written increased by 28.1%.

iptiQ reported a loss before interest and tax of USD 247 million in 2023, compared with a loss of USD 362 million in 2022.

Financial targets and outlook

Swiss Re confirms the financial targets communicated at Investors' Day in December 2023. For 2024, the Group targets a net income of more than USD 3.6 billion under IFRS, while L&H Re targets a net income of USD 1.5 billion. P&C Re targets an IFRS reported combined ratio of less than 87% for 2024. Corporate Solutions targets an IFRS reported combined ratio of less than 93%. Swiss Re targets a multi-year IFRS ROE of more than 14%.

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said: "In 2024, we continue to put emphasis on underwriting discipline as evidenced in the successful January renewals. Our focus on costs and strengthening proximity to our clients also remains paramount. Finally, the accounting transition from US GAAP to IFRS will be beneficial to our earnings and reported balance sheet strength."

Details of full-year 2023 performance

Media conference
Swiss Re will hold a media conference at 10:30 CET today. You can join the media conference via your computer or the Teams mobile app using the following link: Microsoft Teams meeting.

Alternatively, you can dial in (audio only) using the below conference ID and phone numbers:

Conference ID: 136 135 068#

Switzerland:                          +41 (0) 43 210 57 61
United Kingdom:                    +44 (0) 20 7660 8302
United States:                        +1 (1) 347 343 2594
Germany:                               +49 (0) 69 3650 5756 8
France:                                   +33 (0) 1 7037 8776
Hong Kong:                            +852 3704 2823

For additional local dial-in numbers, please click here.

Investor and analyst call
Swiss Re will hold an investors' and analysts' webcast at 14:00 CET, which will focus exclusively on Q&A. The investor and analyst presentation can be accessed here.

Financial calendar 2024

13 March 2024  Publication of Annual Report 2023

12 April 2024   160th Annual General Meeting

16 May 2024   First quarter 2024 results
22 August 2024  Half-year 2024 results
14 November 2024  Nine months 2024 results

1 The Group has prospectively, as from 1 January 2023, revised the methodology used to calculate the combined ratio to include interest on funds withheld.

2 Net of reinstatement premiums of USD 67 million.