NU Online News Service, Feb. 23, 3:31 p.m. EST

Despite the challenges posed by a year of extraordinary catastrophes, Swiss Re says its 2011 net income increased by more than $1.7 billion thanks in part to a reserve release of $1.3 billion.

The Zurich, Switzerland-based reinsurance and insurance company says net income rose from $863 million to $2.6 billion in 2011. Revenues on the year dropped 3 percent or $752 million to $28.1 billion.

The results were helped by the elimination of a one time charge taken last year to pay-off a $2.6 billion loan instrument from Berkshire Hathaway.

Excluding the loan re-payment in 2010, Swiss Re's net income would have been $2.3 billion, which translates into a $300 million increase in net income from 2010 to 2011.

In a video presentation, George Quinn, chief financial officer for Swiss Re, calls 2011 a challenging year for both insurers and reinsurers, noting the financial volatility inEurope and the extraordinary number of natural catastrophes that made last year “the costliest year from an economic perspective.”

Swiss Re's results were positively impacted by prior year favorable accident year development that resulted in the $1.3 billion reserve release and lower tax burden from the company's restructuring.

Quinn says the property and casualty insurance segment was “very strong” despite the catastrophes, posting a combined ratio of 101.6, up 7.7 points from 2010.

Adjusted for natural catastrophes and reserve releases, Swiss Re says the combined ratio stood at 92.9, which Quinn says was one point better than the company predicted last year.

On renewals, Quinn says the company saw substantial growth through 2011 and that growth continued through Jan. 1 renewals. Treaty-year premium volume grew by 20 percent with price increases of around 1 percent on its overall portfolio of business.

“We expect prices to continue to firm in 2012 and we expect to see further opportunities to deploy capital at attractive rates of return,” says Quinn.

In a statement, Michel M. Liès, group chief executive officer says, “Despite the challenging environment, we made considerable progress on our strategic priorities in 2011 by building on our core strengths of disciplined underwriting and prudent asset management.”

The company also announced that Matthias Weber was named group chief underwriting officer and Martyn Parker was named chairman global partnerships, succeeding Liès.

Moses Ojeisekhoba will succeed Parker as CEO reinsurance Asia, regional president Asia.

Special Reports /

Swiss Re Profits Despite Cat Challenges

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