Swiss Re FY19 Profit Climbs, Plans Higher Dividend, Buyback; Stock Dips

Reinsurer Swiss Re (SSREY.PK) reported Thursday significantly higher profit in fiscal 2019 driven by higher premiums mainly in property and casualty businesses, despite heavy natural catastrophe losses. The company also said it will propose higher dividend and share buyback of up to 1 billion Swiss Francs. Swiss Re shares were losing around 5 percent in trading.

Further, the company announced the appointment of Jonathan Isherwood as CEO of Reinsurance Americas, Regional President and member of the Group Executive Committee. He succeeds Eric Smith, who has decided to retire.

Isherwood is currently Head of Globals Reinsurance. He will take over responsibilities as CEO Reinsurance Americas starting April 1 and assume the role of Regional President Americas and join the Group Executive Committee, effective August 14.

Looking ahead to fiscal 2020, Swiss Re said it will focus on completing the sale of ReAssure and improving the performance of Corporate solutions through active portfolio pruning and rate increases.

Swiss Re Group Chief Executive Officer Christian Mumenthaler said, “Our 2019 results were impacted by heavy natural catastrophe losses, our decisive management actions to reposition Corporate Solutions and increased claims in US casualty. We are taking proactive measures to put us at the forefront of adverse trends. … we are starting 2020 with an improved quality of our portfolio, underpinned by strong January renewals and pricing momentum.”

The company noted that January 2020 P&C Re renewals premium volume was up 2 percent as growth in property business was offset by a reduction in casualty.

For fiscal 2019, net income surged 73 percent to $727 million from $421 million last year.

Property & Casualty Reinsurance or P&C Re net income rose 7 percent from last year to $396 million. The property and casualty businesses were impacted by $2.7 billion in large losses from natural catastrophes and man-made events, as well as by increased claims in US casualty.

Life & Health Reinsurance or L&H Re net income climbed 18 percent to $899 million. Corporate Solutions net loss was $647 million, reflecting decisive management actions to address underperformance as well as increased claims in US casualty business.

Group net premiums earned and fee income for the year rose 12 percent to $38.59 billion from $34.46 billion last year, primarily driven by premium growth in P&C Re.

P&C Re net premiums earned increased 20 percent to $19.3 billion, and L&H Re net premiums earned and fee income increased to $13.0 billion.

The company’s ROE improved to 2.5 percent from 1.4 percent last year.

The company’s board of directors will propose a dividend increase of 5 percent to 5.90 Swiss Francs per share to the Annual General Meeting.

Swiss Re shares were trading at 111.45 francs, down 4.58 percent.

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