Swiss Re Group saw its net income plunge in the 2014 first quarter, but the reinsurance giant said it still performed well compared with the “exceptional” results it produced over the same period last year.
That being said, the company’s property/casualty reinsurance combined ratio jumped considerably over the first three months of 2014, thanks to more costly man-made losses and lower reserve releases.
Overall, Swiss Re generated more than $1.2 billion in net income, versus $1.38 billion produced in the 2013 first quarter. Executives said that translated into $3.58 per share in earnings, versus just over $4 per share year-over-year.
“I am pleased with the first quarter performance of our Group,” Michel M. Liès, Swiss Re Group’s chief executive officer, said in a statement, adding he remains confident “that all segments will contribute to achieving our 2011-2015 financial targets.”
Property/casualty reinsurance reported $3.8 billion in premiums earned during Q1, up from more than $3.5 billion in the 2013 first quarter. Swiss Re said that result, plus net income of $1 billion for the division that remained on par with Q1 2013, reflected, in part, realized gains on investments and favorable tax impacts.” But the combined ratio hit 78.8, up substantially from 69.7 in the 2013 first quarter. Swiss Re blamed a higher impact from made-made losses and lower reserve releases.
L&G Re generated $51 million in net income, a drop from $222 million in the 2013 first quarter, due to a loss on an interest rate hedge, Swiss Re said. Premiums earned and fee reached $2.7 billion, up from $2.3 billion year-over-year, a trend attributed to recaptured business, plus major new business in Asia and Europe. Though the division’s returns on equity and investments declined.
Swiss Re’s Corporate Solutions arm reported $830 million in premiums earned, up from $613 million a year ago (thanks to organic growth), though net income declined to $80 million from $101 million a year ago. Fhe The company blamed this on higher man-made losses and claims from business written in previous years. The combined ratio jumped to 95.2 in the 2014 first quarter, versus 87.6 in the 2013 first quarter.
Admin Re, meanwhile, produced $48 million in net income during the 2014 first quarter, versus $78 million a year ago, a drop Swiss Re blamed on a less favorable performance in the U.K. capital markets.