Swiss Re has faced challenges in its financial results due to higher reserves for claims from previous years, particularly in its Property & Casualty Reinsurance (P&C Re) division.
The company's profit for the third quarter of 2024 was $100 million, contrasting with the overall profit of $2.2 billion achieved from January to September. This downturn is primarily due to a $2.4 billion increase in reserves for past-year claims in the U.S. liability business. The total increase in reserves for the first nine months of the year reached $3.1 billion, with a net reserve increase of $2 billion recorded in the third quarter alone. This has strained the P&C Re division, which reported a profit of $603 million, down from $989 million in the first half of the year. Despite these challenges, insurance revenue for the division rose significantly, climbing from $9.8 billion in the first half to $15 billion for the first nine months of 2024.
The third quarter was particularly harsh for Swiss Re, with major losses from natural catastrophes amounting to $813 million in the first nine months. The company faced substantial claims due to severe weather events, including a hailstorm in Calgary, Storm Boris in Europe, and Hurricanes Debby and Helene. These losses contributed to a combined ratio of 92.8 percent for the P&C Re division, an increase from 84.5 percent in the first half of the year. The strengthening of reserves in the third quarter has led to a net increase in the combined ratio by 13.3 percentage points, making it unlikely for the division to meet its target combined ratio of less than 87 percent for 2024. Despite the adverse conditions, Swiss Re's P&C Re division achieved an underwriting result of $1 billion, although this was down from $1.4 billion in the first half.
In contrast to the struggles faced by the P&C Re division, Swiss Re's Life & Health Reinsurance (L&H Re) division has demonstrated stronger performance. The L&H Re division reported a profit of $1.2 billion, bolstered by solid investment returns and robust margins in its in-force business. Insurance revenue for this division reached $12.6 billion, with an underwriting result of $1.2 billion. Swiss Re continues to aim for a full-year profit of around $1.5 billion for the L&H Re division. The company has also been progressing with its withdrawal from the digital insurance platform iptiQ, which was announced in May. The loss from iptiQ amounted to $241 million in the first nine months, and the recent acquisition of iptiQ’s European P&C business by Allianz Direct is expected to further streamline operations.
Looking ahead, Swiss Re projects that group profit will exceed $3 billion for the year, assuming normal loss activity for the remainder of 2024. The company anticipates losses from Hurricane Milton to be under $300 million, which will impact the group's results in the fourth quarter. Swiss Re's CEO emphasized that the substantial strengthening of reserves in the third quarter positions the company favorably for upcoming renewals and future growth. The company's capital position remains strong, and it plans to update the market on new targets for 2025 in the coming month.