Swiss Re Net Income Increases 74%

Excluding the CPCI, Swiss Re said its net income was $2.3 billion with a return on equity of more than 9 percent.

In a statement, Stefan Lippe, chief executive officer for Swiss Re, said, "Over the past two years we have come a long way. Swiss Re has strengthened its balance sheet, set new strategic priorities and aligned its management structure. The company is now taking the next step in shaping the [its] future by adjusting its legal structure to reinforce its strategic priorities and allow it to fully unlock the potential of its business."

In a video presentation, George Quinn, Swiss Re's chief financial officer, said the company performed well despite natural catastrophe losses.

The company's property and casualty business reported that operating income fell 30 percent, or $1 billion, to $2.5 billion. The combined ratio grew 5.6 points to 93.9.

The company said natural catastrophes were 3 percentage points above the expected level and the result was partially offset by 0.8 percentage points from positive run-off.

Swiss Re said it estimates claims from the Queensland, Australia flooding in the 2010 fourth quarter to be $100 million. Swiss Re's first quarter claims estimate stands at $225 million.

The company's claims estimate for losses from Australian Cyclone Yasi is approximately $100 million.

The company cautioned that the estimates are preliminary and "may need to be adjusted" as new information comes to light.

In its two other operating segments, Life & Health reported operating income of $810 million, an increase of 18 percent or $123 million.

Asset management came in with operating income of $4.5 billion, up 23 percent, or $848 million.

The company said it had a very successful January renewal of p&c treaty business. While average reinsurance market prices declined 4-7 percent, the company said it outperformed the market based on disciplined underwriting and "success on non-commodity placements." Risk-adjusted price adequacy fell by 2 percent, the company said.

Its treaty business premiums grew "strongly" by 14 percent driven by increased demand for tailored solutions from large clients and growth in insurance demand, primarily in Asia.

Swiss Re estimates its combined ratio for 2011 will come in at 94, "assuming a normal large loss burden."

Mr. Quinn said the company is going to establish a new holding company making Reinsurance Corporate Solutions and Admin Re separate businesses.

"As we make these changes we will sharpen our focus on clients' needs; we'll substantially increase transparency over capital assets and the performance of these individual businesses," he said. "This, in turn, will increase accountability and position them to benefit from the emerging opportunities."

Swiss Re said that the p&c market will see hardening in 2012-2013 and this would benefit its reinsurance and corporate solutions business.

Over the next five years the company has established targets of return on equity of 700 basis points and earnings per share growth of 10 percent over that same time period.