Swiss Re 'much more comfortable' on US casualty after pruning in reinsurance: Berger

By Henry Gale

Aug 14 - (The Insurer) - Swiss Re does not expect to take further "pruning" actions on its casualty reinsurance book, CEO Andreas Berger said on Thursday, after the reinsurer reduced its casualty premium volume by 26.6% at the mid-year renewals.

Speaking at a media briefing, Berger said Swiss Re decided to scale back its casualty reinsurance book as part of its "drastic actions" on U.S. liability exposures. This also included its $2.4 billion reserve charge last November.

"We had a peak market share of 17% and we reduced it now down to around 5%," he continued. "I think we're now in a position where we feel much more comfortable. So we shouldn't expect a further pruning per se."

He added that Swiss Re will continue to avoid underwriting casualty business where it does not see rate adequacy.

Berger said that Swiss Re had seen nominal price increases of mid-single digits to double digits at recent casualty reinsurance renewals, largely offset by increased loss assumptions.

Swiss Re's premium volume at the mid-year renewals decreased by 5.9%, consisting of a 5% increase in property and specialty and a 26.6% decrease in casualty.

MANAGING MARKET CYCLES

Across different business lines, "market participants largely maintained discipline on terms and conditions" in year-to-date renewals, Berger said.

Swiss Re said it had secured an average nominal price increase of 2.3% at the June and July renewals. A 4.6% increase in loss assumptions resulted in a net price change of negative 2.4%.

"Overall, pricing is still attractive, with the picture across lines being more nuanced given the different stages of the cycles they're in," he continued. "As not all lines of business are correlated, we cannot talk about one single cycle.

"I don't want to compare it to the last cycle where we had a long soft market cycle with a strong amplitude," Berger added. "This, I don't think, will be happening again if we keep the discipline in the market."