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Swiss Re Turns To FY21 Profit, COVID-19 Impact To Remain; Stock Down

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Swiss reinsurer Swiss Re AG reported Friday a profit in its fiscal 2021, compared to prior year's loss, with improved results in property and casualty businesses, despite large natural catastrophe events. Meanwhile, Life & Health Reinsurance were hit hard by significant COVID-19 losses.

For 2022, Swiss Re expects the performance of its P&C Re businesses to continue to improve, with increasing prices, while L&HRe will remain impacted by the COVID-19 pandemic and targets a net income of around $300 million. In Swiss trading, Swiss Re shares were losing around 6 percent.

The company noted that its Board of Directors will propose a stable dividend of 5.90 Swiss francs per share at the Annual General Meeting on April 13.

Further, Swiss Re announced new ambitious segment targets and aims to increase Group ROE to 10 percent in 2022 and 14 percent in 2024 as it focuses on driving profitable growth across all businesses. The company also maintained its economic net worth per share growth target of 10 percent per annum.

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said, "While we remain in an uncertain environment with regards to the pandemic, we are confident in the Group's ability to deliver against these targets, underpinned by our very strong capital position."

Further, the company said Paul Murray has been appointed CEO Reinsurance Asia, Regional President and member of the Group Executive Committee, effective April 1. He will succeed Russell Higginbotham, who will become the CEO of Reinsurance Solutions. Both will continue to report to Moses Ojeisekhoba, CEO Reinsurance.

Paul Murray is currently Head Life & Health Products in Reinsurance, a position he has held since December 2018.

For fiscal year 2021, Swiss Re's net income attributable to common shareholders was $1.44 billion or $4.78 per share, compared to a loss of $878 million or $3.04 per share in the prior year.

The profit was recorded despite large natural catastrophe losses of $2.4 billion across its businesses as well as total COVID-19-related claims of $2.0 billion. The vast majority of the COVID-19 losses originated in the L&H Re business.

Excluding the impacts of COVID-19, Swiss Re's net income was $3.0 billion, an increase of 39 percent from last year.

P&C Re net income was $2.1 billion, compared with a net loss of $247 million in 2020.

L&H Re reported a net loss of $523 million for 2021, compared to prior year's net income of $71 million. Excluding COVID-19 losses, net income increased 26 percent to $1.1 billion.

The losses were primarily driven by the heightened COVID-19-related mortality rates in the US and reflected the spike in infection rates.

Annual total revenues grew to $46.74 billion from $43.34 billion last year.

Net premiums earned and fee income grew 4.8 percent to $42.73 billion in 2021 from last year's $40.77 billion with growth in all its businesses. Net premiums written were $43.22 billion up from $39.83 billion in the previous year.

P&C Re's net premiums earned grew 5.3 percent to $21.9 billion. L&H Re net premiums earned and fee income increased 7.1 percent to $14.9 billion.

The company further noted that P&C Re increased premium volume by 6 percent in the January 2022 renewals and achieved price increases of 4 percent.

In Switzerland, Swiss Re shares were trading at 86.74 francs, down 5.76 percent.

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