Swiss Re grew property & cat premiums at Jan renewals, lifts nat cat budget

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Global reinsurance giant Swiss Re grew its premium volume 9% to $13.1 billion at the January 1st, 2024, reinsurance renewals, with further growth in natural catastrophe, property, and specialty lines, and a flat outcome in casualty.

This morning, the company announced a solid set of results for 2023 with a notable rise in net income within its P&C reinsurance arm, which delivered a combined ratio of 94.8%, beating the target for the year of less than 95%.

Within its report, the reinsurer also provides details of the outcome of its 1.1 2024 renewals, during which 53% of its reinsurance treaty business is renewed.

All in all, premium volume rose 9% from $12 billion at the January 2023 renewals to $13.1 billion at this year’s renewals.

Swiss Re renewed 93%, or $11.1 billion of the business up for renewal, opting to cancel or not place 7%, and with 4%, or $500 million growth on renewed business and 13%, or $1.5 billion of new business secured, the outcome was $13.1 billion in premium volume at 1.1 2024.

Across the portfolio, Swiss Re achieved a price increase of 9% in this renewal round, with rate increases most pronounced in the natural catastrophe space.

Within nat cat, $1.9 billion of premium was up for renewal, and Swiss Re decided to grow by 12% at 1.1 2024 to a premium volume of $2.2 billion. The reinsurer notes improved volume and rates, adding that discipline was maintained on attachment points.

Given the growth in exposure, the reinsurer has raised its expected large nat cat budget for P&C Re by $100 million for 2024 to $1.8 billion.

Growth was also strong in the property portfolio, with 16% growth on $2.3 billion that was up for renewal to a premium volume of $2.7 billion. Swiss Re highlights premium growth in EMEA and Asia, somewhat offset by targeted reductions of low-margin business in North America.

While Swiss Re again decided to grow in nat cat and property amid favourable market conditions, premium growth was most pronounced in specialty. In total, $2.8 billion of business was up for renewal at 1.1 2024, with growth of 19% resulting in an outcome of $3.4 billion. Here, Swiss Re notes engineering, credit & surety and a large transaction as drivers of the premium growth.

Lastly, in casualty, the volume of business up for renewal was maintained with an outcome of $4.9 billion, as reductions in US liability and financial lines were offset by growth in structured motor transactions.

By region, Swiss Re grew the most in EMEA at 1.1 2024, which is in line with the fact the January renewals are heavily focused on Europe, with Japan being the focus in April and the US at the mid-year. In EMEA, $5.2 billion of premium was up for renewal, and with growth of 14%, the outcome was $6 billion of premium volume.

In the Americas, $4.1 billion of business was up for renewal and Swiss Re grew here by 6%, leading to a larger Americas portfolio of $4.3 billion. In Asia, growth of 5% at 1.1 2024 saw the book grow from $2.7 billion to $2.8 billion.

Interestingly, Swiss Re also reveals that loss assumptions increased by 11% at the January 2024 renewals, reflecting the firm’s prudent view on inflation and also loss model updates, notably in casualty.

Overall, Swiss Re says that it managed to improve the quality of the portfolio at 1.1 2024, with a net price change of -2% consistent with the 2024 IFRS combined ratio target of less than 87%.

“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,” said Swiss Re’s Group CEO, Christian Mumenthaler.

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