Group net loss of
Property & Casualty Reinsurance (P&C Re) net income of
Life & Health Reinsurance (L&H Re) net income of
Corporate Solutions net loss of
Strong return on investments (ROI) of 3.2%; running yield of 2.5%
Successful
Industry-leading capital position maintained, with Group Swiss Solvency Test (SST) ratio comfortably above 200% as of
Asset Management successfully navigated market turbulence
Market turbulence was responsible for a US GAAP net valuation loss of approximately
Shareholders' equity declined to approximately
P&C Re net income of
P&C Re reported a net income of
P&C Re's net premiums earned increased strongly by 12% to
Successful April P&C renewals supported by improving pricing, particularly in
April renewals were conducted without disruptions, despite the challenges presented by the COVID-19 crisis. Treaty premium volume increased by 4%, and P&C Re achieved a nominal price increase of 8%, with a notable strong increase on
L&H Re ROE exceeded its target range
L&H Re reported a net income of
The ROE of 15.8% is well above the target 10-12% range. Net premiums earned and fee income increased to
Corporate Solutions turnaround on track
Corporate Solutions reported a net loss of
Excluding the COVID-19 impact, Corporate Solutions' combined ratio was 103.2%, 13 percentage points better than the reported ratio one year ago. On a normalised2 basis and excluding the COVID-19 impact, the Business Unit is on track to achieve the combined ratio estimate of 105% for 2020.
The strong pricing momentum experienced in 2019 continued in the first quarter, with Corporate Solutions achieving price increases of 13%, and current market conditions are expected to reinforce this trend.
Net premiums and fee income for the Life Capital Business Unit decreased to
Outlook
Details of Q1 2020 performance
Q1 2019
Q1 2020
Q1 2020
Excluding COVID-193
Net premiums earned and fee income
(USD millions)
8 933
9 586
Net income/loss
(USD millions)
429
225
158
Return on equity
(%, annualised)
5.9
3.1
2.2
Return on investments
(%, annualised)
4.5 3.2
Running yield
(%, annualised)
2.9
2.5
Shareholders' equity
(USD millions)
29 251
27 979
Book value per share
(USD)
100.64 96.82
Q1 2019
Q1 2020
Q1 2020
Excluding COVID-193
P&C Reinsurance
Net premiums earned
(USD millions)
4 238
4 737
Net income
(USD millions)
13 61 272
Combined ratio (%) 110.3 110.8 105.5
Return on equity
(%, annualised)
0.6 3.0 13.2
L&H Reinsurance
Net premiums earned and fee income
(USD millions)
3 127
3 366
Net income
(USD millions)
328 299
Running yield
(%, annualised)
3.4 3.1
Return on equity
(%, annualised)
19.6 15.8
Corporate Solutions
Net premiums earned
(USD millions)
1 020
986
Net income/loss
(USD millions)
55
167
5
Combined ratio (%)
116.3 125.8 103.2
Return on equity
(%, annualised)
12.1
35.1
1.0
Net premiums earned and fee income
(USD millions)
548 497
Net income/loss
(USD millions)
7
261
Return on equity
(%, annualised)
0.5
21.1
Gross premiums written - open books
(USD millions)
1148 1356
1 2 Also assumes an average large natural catastrophe loss burden and excludes prior-year reserve developments in addition to the COVID-19 impact.
3 This column is for reference only and excludes the impact of the reserves established for COVID-19-related claims, including estimated tax impacts.
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Cautionary note on forward-looking statements
Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets and trends) and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact.
Forward-looking statements typically are identified by words or phrases such as 'anticipate', 'assume', 'believe', 'continue', 'estimate', 'expect', 'foresee', 'intend', 'may increase', 'may fluctuate' and similar expressions, or by future or conditional verbs such as 'will', 'should', 'would' and 'could'. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the Group's actual results of operations, financial condition, solvency ratios, capital or liquidity positions or prospects to be materially different from any future results of operations, financial condition, solvency ratios, capital or liquidity positions or prospects expressed or implied by such statements or cause
the frequency, severity and development of insured claim events, particularly natural catastrophes, man-made disasters, pandemics, acts of terrorism or acts of war;
mortality, morbidity and longevity experience;
the cyclicality of the reinsurance sector;
central bank intervention in the financial markets, trade wars or other protectionist measures relating to international trade arrangements, adverse geopolitical events, domestic political upheavals or other developments that adversely impact global economic conditions;
increased volatility of, and/or disruption in, global capital and credit markets;
the Group's ability to maintain sufficient liquidity and access to capital markets, including sufficient liquidity to cover potential recapture of reinsurance agreements, early calls of debt or debt-like arrangements and collateral calls due to actual or perceived deterioration of the Group's financial strength or otherwise;
the Group's inability to realize amounts on sales of securities on the Group's balance sheet equivalent to their values recorded for accounting purposes;
the Group's inability to generate sufficient investment income from its investment portfolio, including as a result of fluctuations in the equity and fixed income markets, the composition of the investment portfolio or otherwise;
changes in legislation and regulation, or the interpretations thereof by regulators and courts, affecting the Group or its ceding companies, including as a result of comprehensive reform or shifts away from multilateral approaches to regulation of global operations;
the lowering or loss of one of the financial strength or other ratings of one or more companies in the Group, and developments adversely affecting its ability to achieve improved ratings;
uncertainties in estimating reserves, including differences between actual claims experience and underwriting and reserving assumptions;
policy renewal and lapse rates;
uncertainties in estimating future claims for purposes of financial reporting, particularly with respect to large natural catastrophes and certain large man-made losses, as significant uncertainties may be involved in estimating losses from such events and preliminary estimates may be subject to change as new information becomes available;
legal actions or regulatory investigations or actions, including in respect of industry requirements or business conduct rules of general applicability;
the outcome of tax audits, the ability to realize tax loss carryforwards and the ability to realize deferred tax assets (including by reason of the mix of earnings in a jurisdiction or deemed change of control), which could negatively impact future earnings, and the overall impact of changes in tax regimes on the Group's business model;
changes in accounting estimates or assumptions that affect reported amounts of assets, liabilities, revenues or expenses, including contingent assets and liabilities;
changes in accounting standards, practices or policies;
strengthening or weakening of foreign currencies;
reforms of, or other potential changes to, benchmark reference rates;
failure of the Group's hedging arrangements to be effective;
significant investments, acquisitions or dispositions, and any delays, unforeseen liabilities or other costs, lower-than-expected benefits, impairments, ratings action or other issues experienced in connection with any such transactions;
extraordinary events affecting the Group's clients and other counterparties, such as bankruptcies, liquidations and other credit-related events;
changing levels of competition;
the effects of business disruption due to terrorist attacks, cyberattacks, natural catastrophes, public health emergencies, hostilities or other events;
limitations on the ability of the Group's subsidiaries to pay dividends or make other distributions; and
operational factors, including the efficacy of risk management and other internal procedures in anticipating and managing the foregoing risks.
These factors are not exhaustive. The Group operates in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements.
This communication is not intended to be a recommendation to buy, sell or hold securities and does not constitute an offer for the sale of, or the solicitation of an offer to buy, securities in any jurisdiction, including
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