Reinsurance giant Swiss Re has strengthened its property and casualty reinsurance (P&C Re) reserves by an additional $2.4 billion in the third quarter of 2024, following a comprehensive review of its prior year US liability reserves.
This brings the reinsurer’s P&C Re total reserve additions to $3.1 billion for the first nine months of the year.
These additions were partly offset by releases in other lines of business, explains the firm, resulting in a net prior year reserve strengthening in P&C Re of $2 billion in Q3 2024.
This move aligns with Swiss Re’s strategic plans to accelerate the achievement of its goal to position overall reserves at the higher end of the best-estimate range. It is expected that this will allow the recent introduction of an uncertainty allowance on new business to continue supporting the strength of overall reserves going forward.
However, Swiss Re’s P&C Re arm is now expected to miss its combined ratio target of less than 87% in 2024, given the reserving actions taken in the quarter.
Andreas Berger, Group Chief Executive Officer, Swiss Re, commented, “Enhancing the overall resilience of the Group has been a key priority for the management team. We conducted a comprehensive review of our P&C reserves, considering the latest industry data and legal trends.
“With the decisive actions in the third quarter, we have reached our goal of positioning reserves at the higher end of the best-estimate range. Importantly, we have addressed reserve developments in our entire US liability portfolio, including all prior underwriting years.”
For Q3 2024, Swiss Re stated that it expects to report a group net income of approximately $0.1 billion and approximately $2.2 billion for 9M 2024.
Outside the US liability reserving actions, the third quarter is expected to featured strong underlying underwriting and investment results across all of Swiss Re’s business units.
Both L&H Re and Corporate Solutions remain on track to achieve their respective 2024 targets of approximately $1.5 billion net income and a reported combined ratio of less than 93%. Assuming normal loss activity, Swiss Re expects to achieve a group net income of more than $3 billion for 2024.
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