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Global reinsurance giant Swiss Re posted net income of $ 333 million in the first quarter of 2021, compared to a loss of $ 225 million in the same period last year, despite losses related to COVID-19 and major natural disasters of more than $ 1 billion. Dollar.
In addition to growing net income across the group, the reinsurer also saw net premium earned and fee income rise to more than $ 10.2 billion.
However, the ongoing pandemics and major catastrophic events adversely affected the company’s performance in the first quarter of the year, particularly on the life side of the business.
Starting with P&C Re; The segment posted net income of $ 477 million for the first quarter of 2021, compared to $ 61 million a year earlier, driven by continued pricing improvements and disciplined underwriting.
Within P&C Re, major losses from natural disasters were $ 316 million, mainly due to winter storms in the United States. According to Swiss Re, P&C Re’s net income excluding the impact of the pandemic reached $ 509 million in the first quarter of 2021.
The strong growth in new business in 2020 increased P&C Re’s net earned premiums 5.7% to $ 5 billion.
Despite the above-expected effects of COVID-19 and large losses in natural cats, P&C Re has reported a ROE of 21.6% and a combined ratio of 96.5%.
Commenting on P&C Re’s experience of the last renewal season on April 1, 2021, Swiss Re notes that the unit has renewed contracts with a premium volume of $ 2.6 billion.
“This corresponds to a volume increase of 20% compared to the store that had to be renewed, which reflects attractive transaction options and prices. P & C Re achieved a nominal price increase of 4% in this renewal round and was thus able to more than offset lower interest rates and higher loss assumptions, ”says Swiss Re.
Swiss Re’s L&H Re segment offset the net performance of its P&C Re business somewhat for the period, posting a net loss of $ 184 million for the first quarter of 2021.
The main driver of the loss is significant losses of $ 570 million related to the COVID-19 pandemic due to higher death rates in the US and other countries.
“In the US, the first three months of 2021 saw more than 200,000 reported deaths from COVID-19, the highest mortality rate since the pandemic began. Since March, the average daily mortality rate has decreased significantly as vaccination efforts have advanced, ”explains Swiss Re.
Overall, Swiss Re reported $ 643 million in COVID-19 losses in the first quarter, of which $ 585 million was related to mortality claims and reserves. The event cancellation business added $ 18 million, while the business interruption impact was $ 31 million for the period.
“As of the beginning of 2021, many countries had record numbers of deaths related to COVID-19, and our thoughts are with those who have lost a loved one. The devastating number of people left by the pandemic is also reflected in Swiss Re’s financial results as the world’s largest life and health reinsurer. As we continue to support our customers and communities affected by the pandemic, the underlying performance of all of our businesses remains very strong and underpins our trust, ”said Christian Mumenthaler, Group Chief Executive Officer (CEO) of Swiss Re.
At Corporate Solutions, Swiss Re announced net income of $ 96 million for the first quarter of 2021, compared to a net loss of $ 166 million in the same period last year.
The segment’s ROE reached 16.2% and the combined ratio 96%, despite increased catastrophe losses of USD 110 million.
John Dacey, Swiss Re’s Group Chief Financial Officer (CFO), commented: “The return to profitability in our property and casualty business this quarter underscores the earnings potential of our diversified business model. We have effectively absorbed the increased effects of mortality on our life and health businesses and maintained a very strong capital position. “
“We have seen a solid start to 2021 and expect all of our businesses to continue to deliver strong underlying performance with declining COVID-19 losses. I am particularly encouraged by the improvement in profitability in our property and casualty business, which has been supported by strong innovations since the beginning of the year in improving market conditions, ”added Mumenthaler.