The technology, KoiReader says, specifically targets the logistics industry, is capable of handling complex documents seamlessly in a fully automated, lights-out operation. It went live in 2023, facilitating the digitization of a broad array of cargo documentation, such as commercial invoices and bills of lading, among others.
Swiss Re has reported an increase in its net income – reaching US$3.2 billion for the year 2023, with the fourth quarter contributing US$748 million to this total.
The firm also noted a robust return on equity (ROE) of 22.3% for the same period. In light of these positive financial outcomes, the board of directors intends to propose a dividend increase to US$6.80 per share. Looking forward, Swiss Re has set a target net income of over US$3.6 billion for 2024 under IFRS accounting standards.
The reinsurer’s financial results represent a significant improvement from the previous year’s figures of US$472 million net income and a 2.6% ROE. This turnaround, Swiss Re explained, was driven by better underwriting margins and a rise in investment income due to increased interest rates.
Swiss Re’s net premiums earned and fee income also saw growth of 4.4% to US$45.0 billion in 2023, up from US$43.1 billion the previous year. Adjusted for constant foreign exchange rates, this represents a 4.9% increase.
The company’s investment return for the year jumped to 3.4% from 2.0% in 2022, with recurring income yield rising to 3.6% from 2.6% the previous year, benefitting from the higher interest rate environment. By the fourth quarter, the recurring income yield had increased to 3.9%, with the reinvestment yield reaching 5.0%.
Swiss Re maintained a strong capital position throughout the year, supported by robust earnings and the positive effects of higher interest rates, with the Group Swiss Solvency Test (SST) ratio comfortably exceeding its 200–250% target range as of January 1, 2024.
The property and casualty reinsurance (P&C Re) division reported a net income of US$1.9 billion for 2023, up from US$312 million in the previous year, thanks to what the firm described as resilient underwriting and disciplined renewals. The division managed to keep large natural catastrophe claims at US$1.3 billion, below the budgeted US$1.7 billion, despite significant events such as the earthquake in Turkey and Syria, Hurricane Otis in Mexico, and various storms and floods in Europe.
P&C Re’s net premiums earned rose by 3.9% to US$22.9 billion, and its combined ratio for the year was 94.8%, achieving the target of less than 95%.
During the January renewals, P&C Re successfully increased its premium volume by 9% to US$13.1 billion, with a price increase of 9% and updated loss assumptions due to inflation and model adjustments.
The life and health reinsurance (L&H Re) segment also surpassed its net income target, reporting US$976 million for 2023, up from US$416 million in the previous year. This result was supported by strategic portfolio management and strong investment performance, the company said, despite higher mortality claims in the US. The segment’s net premiums earned and fee income rose by 4.4% to US$15.6 billion.
Corporate Solutions continued its strong performance streak with a net income of US$678 million in 2023, up from US$486 million in the previous year, attributed to improved portfolio resilience and a higher investment result.
Net premiums earned remained steady at US$5.5 billion, with an adjusted increase of 7.3% when excluding the sold elipsLife business. The division’s combined ratio was 91.7%, surpassing the target of less than 94%.
“Swiss Re can look back on a successful 2023. We achieved all our financial targets in a year that was characterized by geopolitical turbulence and continued economic uncertainty,” CEO Christian Mumenthaler said.
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The January reinsurance renewal season saw reinsurers maintaining sufficient capacity for casualty programs amid concerns over social inflation and the need for reserve strengthening, as revealed from the latest AM Best commentary.
The report, titled “Despite Heightened Risks, Casualty Reinsurance Renewals See Modest Price Changes,” highlights that reinsurers have kept a disciplined approach to underwriting, particularly in comparison to more volatile property covers. This discipline is also evident in the stability of attachment points and terms and conditions, which are not expected to ease in the near future.
While property catastrophe reinsurance has experienced several price hikes due to an increase in the frequency and severity of weather-related events, reinsurers have shown reluctance to increase capital allocations to these risks until they see more evidence of rate adequacy.
This cautious stance contrasts with the dynamics observed in casualty reinsurance, where reinsurers are carefully balancing their portfolios amid the challenges posed by long-tail risks such as general and commercial auto liability.
The commentary points out that economic and social inflation trends, fueled in part by third-party litigation funding and sophisticated plaintiff attorney tactics, are driving up judgments and affecting lines like commercial auto, general liability, and directors & officers (D&O) liability insurance.
These factors contribute to a landscape where social inflation continues to exert upward pressure on loss costs, with third-party litigation funding delivering high returns uncorrelated to other financial assets.
The commentary also took note of the impact of social inflation on the insurance industry, particularly in sectors like commercial auto, where loss experience remains challenging. Despite consistent rate increases over the past decade, pricing has struggled to keep pace with escalating loss trends, further straining reinsurance pricing.
The analysis also touches on deteriorating driving behaviors since the onset of the COVID-19 pandemic, including increased road fatalities despite fewer miles driven, and the rise in distracted and impaired driving. These trends have led to more severe injuries and litigated claims, amplifying loss severity through punitive damages awarded by sympathetic juries.
This environment has resulted in higher costs for excess of loss reinsurance on individual claims and has challenged the commercial auto sector, which saw underwriting losses in 2022 reminiscent of the 2016-2019 period, with third-quarter 2023 results showing a continued decline.
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The declared dividend amounts to $0.3046875 per share on the company’s 4.875% Fixed Rate Non-Cumulative Redeemable Preferred Shares, Series J. This dividend is scheduled for payment on March 15, 2024, to shareholders who are on record as of February 29, 2024.
Insurtech managing general agent (MGA) Loadsure has unveiled Columbia, a new insurance product designed for the logistics industry, emphasising the use of data to enhance coverage for small and medium-sized enterprises (SMEs).
Columbia offers comprehensive insurance solutions, specifically catering to motor carriers, freight brokers, and freight forwarders, with a focus on covering potential damage to cargo.
The coverage provided by Columbia extends beyond the primary insurance agreement to include various supplemental protections. These additional coverages encompass business personal property, contingent coverage for unforeseen liabilities, contractual penalties, debris removal following an incident, extra expenses incurred during the claims process, freight charges, and shipping containers.
The new proposition leverages advanced data analytics and digital technology to streamline the insurance process for wholesale brokers. This approach enables brokers to quickly and efficiently quote and secure coverage, featuring an automated system for quote generation, policy binding, and document management.
Johnny McCord, CEO and founder of Loadsure, commented on the launch, highlighting the significance of data-driven solutions in advancing the insurance industry and addressing the coverage needs of SMEs within the cargo and freight sector.
“Backed by our industry leading expertise, Columbia will empower brokers to better serve cargo outfits seeking long-term partnerships and the solutions needed to support their businesses,” McCord said.
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Brookfield Reinsurance has outlined its financial results for the quarter and fiscal year ending December 31, 2023.
Key achievements for 2023 included generating $8 billion in annuity sales, with significant contributions from the retail annuity platform, flow reinsurance premiums, and pension risk transfer (PRT) premiums on the North American PRT platform.
The acquisition of Argo Group for approximately $1.1 billion also marked a significant expansion of Brookfield’s US property and casualty (P&C) operations. Additionally, the impending acquisition of American Equity Life is expected to add over $50 billion in insurance assets to the company’s portfolio.
Investment strategies deployed throughout the year yielded returns above 9%, enhancing the gross yield across the portfolio to 5.6%. The company also noted a substantial increase in its equity base and market capitalization, achieved through a successful public exchange offer that did not dilute the holdings of Brookfield Corporation or Brookfield Reinsurance.
Financial performance for the year showed distributable operating earnings (DOE) of $745 million, up from $388 million in the previous year, driven by increased net investment income and the impact of new annuity business. Net income also saw growth, with figures reaching $797 million for the year, compared to $501 million in the prior year, bolstered by DOE contributions and favorable market movements.
Brookfield Reinsurance also reported a strong liquidity position, with approximately $27 billion available across corporate and subsidiary investment portfolios. The forthcoming acquisition of American Equity Life is expected to further enhance liquidity, supporting the transition to higher-yielding investment strategies.
In a strategic move to bolster its balance sheet and market presence, Brookfield Reinsurance also completed a successful exchange offer in November 2023, increasing its publicly traded share base significantly. This initiative enhanced the company’s equity base and market capitalization.
The board has declared a quarterly distribution of $0.08 per share across various classes, aligning with the distribution schedule and amount of Brookfield Corporation. This distribution is slated for March 28, 2024, to shareholders on record as of March 13, 2024.
“Our strong results for 2023 reflect the continued growth of our annuity sales platform, our broadening credit origination capabilities, and the repositioning of recently acquired assets that have contributed to increased investment returns. As we enter 2024, we continue to focus on scaling our business in a disciplined manner, focusing on our competitive advantages to grow our core business lines and delivering strong risk-adjusted returns,” Brookfield Reinsurance CEO Sachin Shah said.
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“In an era where technological innovation and insurance are evolving rapidly, we are delighted to expand Augment Risk’s offering with an ILS division. With Thad’s industry background and an exceptional insight into ILS structuring, we are well positioned to deliver alternative and bespoke capital solutions to our clients, alongside the traditional reinsurance capacity,” Augment Risk CEO Andrew Matson said.
PartnerRe and its subsidiaries have maintained its superior rating, bolstered by the group’s solid operating performance, highly favorable business profile, and effective enterprise risk management strategies, it was stated.
AM Best has maintained the Financial Strength Rating (FSR) of A+ and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” for the company and its operating subsidiaries. Additionally, the Long-Term ICR of “a-” (Excellent) for Pembroke, Bermuda- based firm, has also been affirmed. These ratings have been assigned a stable outlook, indicating a steady projection for the future.
The affirmation of these ratings by AM Best underscores PartnerRe’s robust balance sheet, described as the strongest by the rating agency.
The ratings come in the wake of solid performance and capital stability, even as the company transitions to a new ownership structure under Covéa Coopérations (Covéa Coop). It has announced the impending retirement of its president and CEO Jacques Bonneau, with Phillipe Meyenhofer stepping in as the new CEO and Jon Colello as the new president. Both Meyenhofer and Colello are currently serving in executive roles within PartnerRe.
The first three quarters of 2023 saw PartnerRe benefiting from lower catastrophe-related losses, enhanced investment returns, and favorable pricing dynamics in the property reinsurance market.
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The sale process has officially commenced, with promotional materials already dispatched to potential purchasers, including private equity entities and financial services firms based in Asia. The report, however, notes that the sale deliberations are at an early stage, and no definitive choices have been made. Fosun retains the option to halt the sale process at any point.
The Fortegra Group, a multinational specialty insurer, has confirmed the withdrawal of its previously announced initial public offering.
Fortegra is a subsidiary of Tiptree Inc. In a news release, the insurer said that it was withdrawing the registration statement relating to its IPO due to “prevailing market conditions” and the “high value” placed on its growth prospects by Tiptree and Warburg Pincus.
“Tiptree and Warburg remain committed to supporting Fortegra as it continues to execute its growth strategy,” Fortegra said in the news release.
Tiptree originally announced plans to take Fortegra public late last year. Tiptree, which planned to retain majority ownership of the insurer, said in November that any proceeds from the IPO would be used to support Fortegra’s growth.
Fortegra is based in Florida and has 15 locations across the globe. Last month, the company announced the appointments of Eric Halter as senior vice president for business development and Bianca Hoshina as chief reinsurance buyer.
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