Swiss Re 2022 net income of $900m on nat cat losses
Swiss Re reported 2022 net income of USD 472 million after a heavy natural catastrophe year and war-related reserving, against a backdrop of elevated global insured losses. The result came despite USD 2.7 billion of large nat cat claims in the first nine months and a combined ratio above 100%, leaving the group targeting a sharp rebound in profitability in 2023.
Swiss Re’s underwriting result in 2022 was dominated by natural catastrophe experience and inflation effects rather than premium volume dynamics. Large nat cat claims reached USD 2.7 billion in the first nine months, with USD 2.5 billion in the third quarter mainly tied to Hurricane Ian, floods in Australia and South Africa, and hailstorms in France. The combined ratio for the first nine months stood at 106.1%, which Swiss Re linked to nat cat losses and the impact of economic inflation on claims costs. Net premiums earned and fee income for the group still rose 1.3% to USD 32.4 billion over the same period versus 2021, indicating growth in the underlying book despite loss volatility.
War-related reserving added another layer of strain on 2022 earnings. Swiss Re booked first‑quarter reserves of USD 283 million related to the war in Ukraine, contributing to a net loss of USD 285 million for the first nine months and a negative return on equity of –2.1% over that period.
The loss experience at Swiss Re sat within a broader industry pattern of elevated catastrophe costs and constrained profitability. Swiss Re reported that global economic losses from natural catastrophes reached USD 275 billion in 2022, of which USD 125 billion were insured, and estimated total insured catastrophe losses at USD 132 billion when including USD 7 billion from man‑made events. Within that, Swiss Re put full‑year insured nat cat losses at around USD 115 billion, which it said would make 2022 the fourth‑costliest year on record for the sector. The group estimated overall non‑life insurance industry profitability, measured by ROE, at 3% in 2022, down from 6% in 2021, showing how the loss burden and inflation compressed returns across the market.
Swiss Re executives framed the 2022 nat cat outcome as an exposure and inflation story rather than an outlier in hazard frequency or severity. Martin Bertogg, Head of Catastrophe Perils at Swiss Re, said the magnitude of 2022 losses did not stem from exceptional natural hazards but from growing property exposure, amplified by exceptional inflation.
Looking ahead, Swiss Re’s published forecasts and targets set out a more demanding profitability ambition against a weaker real growth backdrop. The group forecast real growth in non‑life premiums at a below‑trend 1% in 2023, indicating limited volume support for earnings in real terms. Against that, Swiss Re stated it is targeting more than USD 3 billion of net income for 2023, a step‑up of over USD 2.5 billion from the 2022 outturn.
The combination of elevated nat cat losses, inflation, and below‑trend real premium growth means Swiss Re’s 2023 earnings target depends on a different loss and pricing environment than 2022 delivered. The next key reference point will be how actual nat cat activity and inflation‑driven claims trends compare with Swiss Re’s assumptions over the 2023 underwriting year.
