Claims rise as takings triple for Swiss Re
SWISS Re bucked the market trend and tripled its profit in 2011, despite a series of natural disasters that severely damaged the insurance industry.
The firm beat expectations to record a full-year profit of $2.63bn (£1.68bn), compared with $863m in 2010.
Swiss Re also announced plans to raise its dividend and said the current year had started well with a rise in prices.
The firm, the world’s second-biggest reinsurer by market capitalisation, said renewal prices with insurance company clients had on average risen four per cent in January, compared with the two per cent rise reported by larger rival Munich Re.
Profit was helped by a good investment result, a low tax rate due to corporate restructuring, a rise of nearly 11 per cent in property and casualty premium income, and a release of $1.3bn of reserves.
Asset management saw a 5.1 per cent return on investments.
“The result was exceptional and not one I would expect asset management to repeat in 2012,” said chief financial officer George Quinn.
He also said the group would likely not be able to benefit from the exceptionally low 2011 tax rate this year and would concentrate on its core markets while looking to exploit growth possibilities in Asia and South America.
The Zurich-based firm recorded natural catastrophe claims of $3.5bn — nearly three times what it expected. The bill from floods in Thailand reached $680m and the Japanese earthquake was priced at $1.19bn.
However the firm has minimal exposure to Greek sovereign debt, which has hit profits at some of Swiss Re’s competitors.
Shares in the firm closed up 2.6 per cent at SFr54.40 (£38.35).