Release Date: August 06, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Swiss Re AG SSREF reported a strong net income of USD2.8 billion for H1 2026, exceeding 60% of its full-year target of USD4.5 billion.
- The Group achieved an excellent 23% return on equity, driven by strong underwriting results across all three core businesses.
- P&C Reinsurance posted an excellent combined ratio of 76.7%, well below its full-year target of below 85%, supported by low large NatCat losses and favorable reserve releases.
- Life & Health Re delivered a strong result with two consecutive quarters of clean earnings, driven by favorable US mortality experience and strong in-force margins.
- The company increased its operating cost reduction target to USD500 million by 2028, reflecting strong progress and further efficiency opportunities.
- Swiss Re AG (SSREF) maintains a very strong capital position with an estimated group SST ratio of 264%, comfortably above its target range.
- The company is making good progress on its USD1.5 billion share buyback, having executed approximately 60% by the end of July.
- Corporate Solutions continued its strong performance with a combined ratio of 86.1%, supported by favorable experience and strategic growth in focus areas.
- The company announced exclusive strategic partnerships in Mexico and India, strengthening its global capabilities and presence in attractive growth markets.
- Swiss Re AG (SSREF) achieved volume growth of 11% at mid-year renewals, driven by new business wins in proportional property and selected specialty lines.
Negative Points
- Competition remains pronounced in non-proportional property, with nominal pricing down by high-single digits year-to-date.
- New business CSM for P&C Re decreased to USD1.6 billion from USD2.2 billion in the prior year, reflecting higher loss picks and a modest impact from the facultative book.
- Life & Health Re new business CSM declined to USD338 million from USD569 million, primarily due to lower transaction activity.
- Corporate Solutions experienced a risk-adjusted commercial rate decline of around 6% across the portfolio during the first half of the year.
- The company increased loss assumptions by 4.4% year-to-date, almost entirely explaining the risk-adjusted price decline of 4.6%.
- Swiss Re AG (SSREF) took a reserve increase in Q2 related to business in runoff from the former Life Capital unit, impacting group items.
- The expense ratio for P&C Re has been trending upwards, partly due to lower revenues and FX impacts.
- The company expects to not achieve 100% CSM sustainability in Life & Health Re this year, indicating a shortfall in new business generation.
- The market environment remains competitive, with risk-adjusted commercial rates down across the portfolio, particularly in non-proportional property.
- The company faces potential headwinds from the peak of the hurricane season, which could impact results in the second half of the year.
Q & A Highlights
Q: How should we view the structural nature of short-tail reserve releases for earnings beyond 2027, and are the long-tail IBNR additions purely prudence or a response to deteriorating trends?
A: Anders Malmstroem (Group CFO) explained that the reserve releases stem from low NatCat losses and the prudent reserving philosophy implemented in recent years, which is now manifesting as positive development. The additions to long-tail IBNR reserves are not a reaction to any worsening trends but rather an opportunity to strengthen balance sheet resilience in a strong environment. He clarified that the sequential decline in loss picks at mid-year renewals is due to business mix, not a change in underlying assumptions.
Q: Given the decline in new business CSM, how should we think about the direction of P&C earnings into 2027, and what are your thoughts on the US Casualty market conditions?
A: Anders Malmstroem (Group CFO) noted that while the reduction in new business CSM provides some indication, the company is benefiting from reserving at the upper end of the best estimate range. He reaffirmed confidence in the below 85% combined ratio target for 2026, with mid-triple-digit reserve releases baked into expectations. Andreas Berger (Group CEO) added that on Casualty, the company is happy with its market position, and loss assumptions have been increased more than nominal price changes, reflecting a continued prudent approach.
Q: What is the motivation behind increasing the cost reduction target to USD500 million by 2028, and can you provide qualitative comments on the reserving percentile for the Casualty book?
A: Anders Malmstroem (Group CFO) stated that the increase reflects strong progress on the initial USD300 million target and further opportunities to simplify operations, focusing on non-client facing teams. On reserving, he reiterated that the company remains at the upper end of the best estimate range, consistent with the 90th percentile philosophy announced previously, without providing an exact number. The positive reserve development quarter after quarter confirms this approach is working.
Q: Does the mid-triple-digit reserve release expectation include the uncertainty loading, and how are you viewing the competitive positioning in Life & Health new business?
A: Anders Malmstroem (Group CFO) clarified that the mid-triple-digit reserve release was part of the assessment when setting the below 85% combined ratio target, accounting for pricing pressures offset by prudent loss picks. On Life & Health, he acknowledged that new business CSM is below the 100% sustainability objective this year due to lumpy transaction activity, but the company remains comfortable with returning to a normal run rate in the second half, with 100% sustainability remaining a long-term goal.
Q: Can you bridge the 30% reduction in new business CSM between prudency, volume, and margin, and should we extrapolate the USD1 billion short-tail reserve releases?
A: Anders Malmstroem (Group CFO) explained that the reduction is in line with renewal trends, with nominal pricing flat and increased loss assumptions reflecting prudence. He did not guide that the reduction is zero underlying pressure but emphasized the commitment to reserving at the upper end of the best estimate range. He did not encourage extrapolating the USD1 billion release, noting it reflects the unwind of prior prudency from benign NatCat experience.
Q: What drove the 90-basis-point quarter-on-quarter improvement in reinvestment yield, and how should we view the rising expense ratio in P&C Re?
A: Anders Malmstroem (Group CFO) attributed the higher reinvestment yield to a temporary higher allocation to spread products like public and private credit during Q2, not a change in strategic asset allocation. On the expense ratio, he noted an FX component and lower revenues, but cost reductions are group-wide and will not materially impact the ratio. Andreas Berger (Group CEO) added that the expense ratio remains at competitive benchmark levels.
Q: What could drive P&C revenue growth in coming quarters, and is the Life & Health target of USD1.7 billion conservative given the strong H1 performance?
A: Anders Malmstroem (Group CFO) noted that Q3 typically sees higher revenue due to NatCat seasonality in expected claims. On Life & Health, he stated that the above-target performance is driven by better-than-expected experience variances, and normalizing for that brings results exactly in line with the USD1.7 billion target, reflecting a conservative but realistic outlook.
Q: How should we interpret the sequential decline in loss assumptions from 4.6% in January to 4.2% at mid-year renewals?
A: Anders Malmstroem (Group CFO) clarified that this is not a change in loss picks but a reflection of the different business mix across renewal periods. He emphasized that individually by business line, the assumptions have been consistent since the beginning of the year, and the overall trend is a continuation of the prudent approach.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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