Swiss Re sounded an upbeat note for 2012 and said reinsurance prices could rise further after it posted a forecast-beating profit for the first quarter thanks in part to the absence of large natural catastrophes.
The firm, which competes with Germany's Munich Re, recorded a profit of $ 1.1 billion for the first three months of the year, beating an average forecast for a $633 million profit in a Reuters poll.
The volume of reinsurance policy renewals in April, chiefly focused on Asia, rose 14 percent, the Zurich-based firm said on Friday. Policy rates in Japan rose as a result of the earthquake and tsunami last year, while other markets such as Korea also saw increases.
“We expect to see continued price rises and further growth for the upcoming renewals in 2012,” Chief Financial Officer George Quinn said on Friday.
First-quarter net premiums in the property and casualty segment rose by 38 percent owing to the strong renewals, the firm said.
For the property and casualty business the combined ratio, a measure of underwriting profitability, improved to 85 in the first quarter, compared with 171 a year earlier.
Last year was one of the costliest ever for insurers due to an unusually high number of severe disasters. Huge claims due to the Japanese earthquake and tsunami meant Swiss Re posted a loss for the first three months of 2011 of $665 million.
Swiss Re, which also competes with Hannover Re, has already paid back a convertible loan it took from U.S. billionaire Warren Buffett after risky bets soured during the financial crisis, and also achieved its goal of reclaiming its former good credit rating.
The firm confirmed its mid-term financial targets. These 2011-2015 targets include annual earnings per share growth of 10 percent over five years.
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