Swiss Re beats with Q2 net profit of $1.33 billion, P&C Re CR improves to 76.3%

By David Bull

Aug 14 - (The Insurer) - Swiss Re has maintained its full-year targets after reporting a second-quarter net profit of $1.33 billion, ahead of the consensus estimate of $1.20 billion, as it said it secured an average price increase of 2.3% at the mid-year reinsurance renewals.

Insurance revenue dropped 3% to $10.54 billion during the period but the combined ratio for its P&C reinsurance business improved to 76.3% from 84.4%, while for Corporate Solutions the metric deteriorated slightly to 88.0% from 87.6%.

The company-published consensus, compiled by Vara Research based on 16 analyst submissions, was 80.2% for P&C reinsurance and 90.2% for Corporate Solutions.

Other key quarterly metrics included an investment result of $1.16 billion, up from $1.09 billion in Q2 2024.

The company reported a net profit of $2.60 billion for the first half of the year, an increase of 24% year on year, with a return on equity (ROE) of 23%. The earnings release highlighted “healthy” underwriting margins across all business units, supported by a solid investment result.

Insurance revenue was down 6% to $20.94 billion for the half-year, while the insurance service result increased 5% to $3.00 billion.

Shareholders’ equity stood at to $22.71 billion at June 30, up 4% from the end of 2024.

Swiss Re’s group CEO Andreas Berger said: “The group delivered a strong result for the first half of 2025 while supporting our clients through peak risks, particularly in the first quarter. The performance reflects our continued focus on underwriting quality, meticulous portfolio management and a prudent investment strategy.”

P&C reinsurance net income increased 23% to $1.22 billion during the first half, while the insurance service result rose 11% to $1.57 billion despite insurance revenue declining 8% to $8.92 billion.

The lower insurance revenue was attributed to “pruning actions” taken in casualty and “increased revenue seasonality” between the first and second half of the year.

The combined ratio in the division improved to 81.1% from 84.3%, comfortably within the sub-85% target for the full year.

Swiss Re said the half-year performance was supported by “disciplined underwriting” as well as low large natural catastrophe claims experience in the second quarter, favourable prior-year reserve development and a “solid” investment results.

Large nat cat claims were $556 million in the first half, largely from the LA wildfires, while large man-made losses totalled $213 million.

P&C RE VOLUME DOWN 5.9% AT MID-YEAR BT PRICE UP 2.3%

In its earnings release, Swiss Re said it renewed contracts with $4.5 billion in treaty premium volume at the mid-year renewals.

This represented a 5.9% decrease compared with the business up for renewal as the reinsurer continued to trim back its casualty lines.

However, on a year-to-date basis, P&C reinsurance has achieved a treaty premium volume increase of 3%.

At the mid-year renewals, price increase on the book was 2.3%, but that lagged behind loss assumptions that increased by 4.6%, based on what Swiss Re described as a “prudent view” on inflation and updated loss models. The portfolio quality is consistent with 2025 financial targets, said the company.

P&C reinsurance generated new business contractual service margins of $2.2 billion for the first half, in line with the same period of 2024.

CORPORATE SOLUTIONS H1 CR IMPROVES

Corporate Solutions reported a 2% drop-off in net income to $430 million for the first half, with insurance revenue down 1% to $3.75 billion and the insurance service result up 1% to $515 million.

The combined ratio improved to 88.2% from 88.7%, within its sub-91% target for the full year.

Swiss Re said that the “continued strong result” reflected a consistent underlying business performance in the insurance business, despite elevated man-made claims experience, with losses in the period totalling $193 million.

Large nat cat losses of $60 million came largely from the LA wildfires and Tropical Cyclone Alfred in Australia.

Insurance revenue of $3.7 billion was in line with H1 2024 as Swiss Re pointed to “stringent portfolio steering and focused growth” that largely offset the previously announced non-renewal of the Irish Medex business.

Corporate Solutions' new business CSM of $262 million was up from $223 million in H1 2024.

Net income from life and health reinsurance was down 5% to $839 million, with insurance revenue down 6% to $8.04 billion and the insurance service result down 11% to $900 million.