Swiss Re combined ratio improves after ‘better than expected natural catastrophe experience’

Swiss Re Ltd. announced Friday its third quarter premiums and fee income increased 11%, its casualty combined ratio improved by 19.2 points and that its board is recommending, for election as a director, a former executive from the Montreal firm that controls Canada Life Assurance Company and Great-West Life Assurance Company.

For the third quarter of this year, Zurich-based Swiss Re reported a combined ratio, in property and casualty reinsurance, of 76.7%, down 4.8 points from 81.5% in 2013.

Those results “were mainly driven by lower natural catastrophe and man-made losses, supported by favourable prior  accident year development,” Swiss Re stated Friday in its financial report.

Swiss Re also announced Friday that its board plan to propose Philip K. Ryan, chairman of the Swiss Re America Holding Corporation Board, to the Swiss Re Group board of directors. Until May 2012, Ryan was chief financial officer of Montreal-based Power Financial Corp. (and its parent firm Power Corp.). Power Financial has a controlling interest in Great-West Lifeco Inc., which in turns owns Winnipeg-based Great West Life, Toronto-based Canada Life and London, Ont.-based London Life Insurance Company, among others.

Swiss Re’s premiums earned, from p&c reinsurance, were $4.305 billion in the latest quarter, up 9% from $3.951 billion in Q3 2013. All figures are in United States dollars. The U.S. dollar was trading at $1.14 Thursday.

Total revenues for the third quarter were $9.662 billion this year, up 5% from $9.177 billion in 2013. Premiums earned and fee income was $8.312 billion in Q3 2014, up 11% from $7.475 billion in Q3 2013.

Of the premiums earned and fee income in the latest quarter, $2.873 billion was from life and health reinsurance (up 17% from $2.452 billion in Q3 2013), $903 million was in corporate solutions (up 14% from $791 million in 2013) and $231 million was from Admin Re (down 18% from $281 million in 2013).

For the entire group, net income attributable to common shareholders was $1.227 billion in Q3 2014, up 14% from $1.072 billion in Q3 2013.

Total claims and claims adjustment expenses were $2.778 billion in Q3 2014, up 7% from $2.588 billion in 2013.

Within p&c reinsurance, Swiss Re’s property combined ratio was 67.6% for the first nine months of  2014, a 4.6-point improvement from 72.2% for the same  period of 2013. In Q3, the property combined ratio was 60.8% this year, up from 58.8% in 2013.

“Both periods benefited from better than expected natural catastrophe experience,” Swiss Re stated.

Also within p&c reinsurance, the combined ratio in casualty was 102.1% in Q3 2014, a 19.2-point improvement from 121.3% in Q3 2013.

“The decrease was mainly driven by lower expenses,” Swiss Re stated. “In addition, the comparative  period of 2013 was impacted by reserve  strengthening for US asbestos and for motor in the UK and France, as well as by losses from the hailstorms in Germany.”

In specialty, the Q3 combined ratio dropped 13.6 points, from 70.9% in 2013 to 57.3% this year, “mainly due to positive claims experience across all lines and lower expenses following the premium tax provision release.”

That was “partially offset by a new large loss in aviation, while the third quarter of 2013 was affected by a large loss in marine,” Swiss Re reported.

Net income attributable to common shareholders was $1.227 billion in Q3 2014, up 14% from $1.072 billion in 2013.

For the first nine months of the year, Swiss Re reported premiums earned of $23.044 billion, up from $20.649 billion in the same period of 2013. Total revenue, year-to-date, was $27.989 billion in 2014, up from $26.957 billion in 2013.

Claims and claims adjustment expenses were $7.896 billion in the first nine months of this year, up from $7.057 billion in the first nine months of 2013.

Swiss Re stated Friday its board will propose Ryan and Trevor Manuel – a former cabinet minister of South Africa – as new members for election at the annual general meeting, scheduled April 21, 2015.

Ryan has been a board member of the Swiss Re America Holding Corporation Board since 2010 and chairman since October 2012. His former employer, Power Financial, holds 67% of Great-West Lifeco, which in turns owns Great-West Life, London Life, Canada Life, Irish Life Group Ltd. and Putnam Investments LLC. Power Financial also owns the majority of IGM Financial Inc., which in turn owns Investors Group Inc., MacKenzie Financial Corp. and Investment Planning Counsel Inc. Before working for Power, Ryan worked for 22 years at Credit Suisse.