(Adds detail, background)
ZURICH Feb 23 Swiss Re, the world's
second-largest reinsurer, confirmed its mid-term targets on
Thursday even as continued pricing pressure saw its January
renewals drop 18 percent.
Fourth-quarter net profit fell 45 percent as claims from
natural disasters such as Hurricane Matthew and an earthquake in
New Zealand proved costly for the reinsurer.
Pricing pressure coupled with large man-made losses led to a
$15 million loss in its corporate solutions business for the
Its shares were indicated 2 percent lower in pre-market
"Overall market conditions are challenging but rate
decreases in property (including natural catastrophe business)
and specialty have started to slow down," Swiss Re said.
January renewals fell to $8.5 billion from $10.3 billion the
previous year, it said, citing underwriting discipline and
January renewals act as an important signal of pricing
"Casualty prices remain generally more stable with
significant differences by market and product," it said.
Swiss Re and other reinsurers act as financial backstops for
insurance companies, helping them cover the cost of claims from
natural and man-made disasters.
The industry, which derives a portion of earnings directly
from premiums when these exceed loss payouts and another from
investments on the huge sums of capital reinsurers must hold,
has been squeezed by falling industry prices for years.
Swiss Re proposed raising its regular dividend to 4.85 Swiss
francs from 4.60 francs in 2015 and announced a new share
buyback programme of up to 1 billion Swiss francs ($990
After a strong result in 2015, when the group's bottom line
was boosted by a one-off tax gain and modest catastrophe losses,
full-year net profit fell 23 percent to $3.558 billion.
That was behind the average estimate of $3.716
billion in a Reuters poll of analysts.
German rival Munich Re posted a 16 percent drop
in preliminary full-year profit.
($1 = 1.0103 Swiss francs)
(Reporting by Brenna Hughes Neghaiwi; Editing by Michael