Swiss Reinsurance's net profit soars 47% in 2025; life and health insurance businesses fall short of targets

Investing.com - Swiss Re Group (SIX:SRENH) announced on Friday that its annual net profit reached $4.76 billion, a new record high, up 47% from the same period last year. However, its life and health reinsurance business failed to meet profit targets due to a $650 million update in assumptions caused by poor-performing investment portfolios in Australia, Israel, and South Korea.

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The Zurich-based reinsurance company’s life and health reinsurance division is expected to generate a net profit of $1.27 billion in 2025, short of the approximately $1.6 billion target. The division’s insurance services revenue declined 23% from $1.53 billion in 2024 to $1.18 billion.

The group’s return on equity increased from 15% a year ago to 19.6%, with shareholders’ equity growing 15% to $25.11 billion. Book value per share rose 14% to $85.15.

The company stated that the review of its life and health insurance portfolios is now complete, and all three business units are “ready to deliver stable performance.”

Swiss Re’s property and casualty reinsurance division is the group’s largest profit contributor, with a net profit of $2.77 billion, more than doubling from $1.22 billion in 2024. The combined ratio decreased from 89.9% a year ago to 79.4%.

However, the renewal as of January 2026 shows a widening gap between pricing and loss assumptions. The property and casualty reinsurance division saw only 0.3% rate increases, while loss assumptions rose 4.6%, leading to a 4.3% decrease in net prices. The renewal treaty’s premium volume was $12.4 billion, unchanged from the previous renewal period.

In 2025, large natural disaster claims in the property and casualty reinsurance division totaled $813 million, below the annual budget of $2 billion. The losses were mainly caused by the Los Angeles wildfires and Hurricane Melissa. Large man-made losses increased by $345 million.

The corporate solutions division reported a net profit of $988 million, up from $829 million, with the combined ratio decreasing from 89.7% in 2024 to 86.5%. The division’s $148 million in natural disaster losses were also mainly due to the Los Angeles wildfires.

Chief Financial Officer Anders Malmström said the group is “fully prepared to increase shareholder returns,” citing strong capital generation and “our focus on managing property and casualty pricing cycles” as reasons for the large buyback program.

Swiss Re’s board will propose a dividend of $8 per share for 2025 at the annual shareholders’ meeting on April 10, representing a 9% increase.

The company also plans to buy back up to $1.5 billion of its own shares in 2026, with $500 million as part of a sustainable annual plan and $1 billion as a special tranche. The buyback is expected to be completed before December 31, 2026, subject to regulatory approval.

As of January 1, 2026, the group’s Swiss Solvency Test ratio is estimated at 250%, including the proposed capital return.

The group’s investment return remains at 4%, with recurring yield increasing from 4% in 2024 to 4.2%. The fourth-quarter reinvestment yield was 4.4%.

Swiss Re has set its 2026 group net profit target at $4.5 billion, below the record level in 2025. The net profit target for the life and health reinsurance division is $1.7 billion, reflecting the company’s claimed strengthening of its investment portfolio.

Swiss Re announced it will nominate Jean-Jacques Henchoz, former CEO of Hannover Re, as an independent non-executive director. Larry Zimpleman, a board member since 2018, will not seek re-election.

The company also appointed Henock Teklu, formerly at BlackRock Investment Management, as Group Chief Transformation Officer, effective April 1, 2026.

Group insurance revenue declined 5% from $45.6 billion in 2024 to $43.14 billion.

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