Swiss Re reports 12.3% increase in Q2 property & casualty reinsurance premiums

Swiss Re Ltd. reported Wednesday its financial results for the second quarter, reporting a 7.6-point improvement in its property and casualty reinsurance combined ratio, a 12.3% increase in P&C reinsurance premiums earned and a 35.6-point deterioration in its liability reinsurance combined ratio.

Zurich-based Swiss Re reported net income of $802 million on premiums earned and fees of $7.56 billion for the second quarter of 2014, compared to net income of $786 million on premiums earned and fees of $6.795 billion during the same period in 2013.

All figures are in United States dollars.

Total revenues — which include investment income and gains — were $9.383 billion in the latest quarter.

In P&C reinsurance, Swiss Re reported a combined ratio of 93.5% in Q2 2014, a 7.6-point drop from 101.1% in Q2 2013. Premiums earned in P&C reinsurance increased 12.3% year over year, from $3.17 billion in Q2 2013 to $3.56 billion in the most recent quarter. That increase was “mainly driven by the expiry of quota share agreement in 2012 and large Asian and Americas transactions written at the end of 2013, partially offset by the non-renewal of a large European deal,” Swiss Re stated in a press release.

Of the $3.56 billion in net premiums earned in P&C reinsurance in Q2, $1.393 billion was in property, $1.572 billion was in casualty and $595 million was in specialty.

In property reinsurance, the underwriting results was $127 million and the combined ratio was 90.9% in the latest quarter, down from 110.3% in Q2 2013, Swiss Re noted in an investor presentation. Q2 2013 was “impacted by floods in Europe and Canada.”

In casualty reinsurance  (which includes motor, liability and accident and health), the combined ratio in the latest quarter was 104.7%, up from 103.1% in Q2 2013. The combined ratio in liability was 117.8% on net premiums earned of $522 million in Q2 2014, up from 82.2% in Q2 2013. The second quarter of 2013 “benefitted from net reserve releases, while Q2 14 was impacted by adverse large loss developments,” Swiss Re noted of its liability results.

The combined ratio in motor reinsurance improved by a point year over year, from 101.3% in Q2 2013 to 100.3% in the latest quarter. In accident and health reinsurance, the combined ratio plummeted from 161.9% in Q2 2013 to 80.7% in Q2 2014. One “main driver” of that change was reserve increases in Q2 13 for workers compensation, Swiss Re noted.

In specialty reinsurance (which includes marine, engineering, credit and other), Swiss Re reported net premiums earned of $595 million in Q2 2014. The combined ratio was 70.1%, down from 76.5% in Q2 2013. In marine, the combined ratio was 89.2%, down from 110.1% in Q2 2013. That quarter was  “impacted by loss estimate increase” from the Costa Concordia cruise ship that was wrecked off the coast of Italy in January, 2012. In engineering reinsurance, which had net premiums earned of $202 million in Q2 2014, the combined ratio dropped from 66% in Q2 2013 to 52% in Q2 2014.

Net income in P&C reinsurance climbed 21%, from $455 million in Q2 2013 to $553 million in the latest quarter.

Across the entire company (including P&C,  life, health and corporate solutions), Swiss Re reported total claims and adjustment expenses of $2.662 billion in the most recent quarter, compared to $2.661 billion in Q2 2013. In P&C reinsurance, Swiss Re reported total claims and claims adjustment expenses of $2.148 billion in Q2 2014.

In Q2 2014, Swiss Re reported premiums earned and fees of $2.895 billion life and health and $841 million in corporate solutions, which offers more than 40 products to corporations. The combined ratio in corporate solutions was 93.2% in Q2 14, down 3.7 points from 96.9% in Q2 2013. Swiss Re also reported premiums earned and fees of $264 million from Admin Re, a Swiss Re unit that acquires and administers books of life insurance that are closed to new business.