Swiss Re's 161st Annual General Meeting will take place on April 11. The reinsurance group will be welcoming shareholders to the Hallenstadion Zurich from 8:30 a.m. with coffee. No further culinary highlights are to be expected. "No drinks reception will be served after the Annual General Meeting", the company writes in the invitation. The participants will be able to cope with this. After all, Swiss Re served its shareholders a good meal in the 2024 financial year. The number 2 in the sector increased its profit by almost USD 100 million to USD 3.238 billion. Swiss Re thus met its own targets and performed better than analysts had expected. The dividend proposal was also above consensus. The Annual General Meeting will vote on a distribution of USD 7.35 per share - 8% more than a year ago. A strong share price performance rounds off the stock market menu: Over a 12-month period, Swiss Re's capitalization has expanded by 29%. This puts the share at the top of the SMI ranking for this period.
The Zurich-based company's strategy appears to be working on the stock market. "Our focus in 2024 was on profitability and resilience," explains CEO Andreas Berger. In addition to the profit, he cites the return on equity as proof of the successful work. Swiss Re generated a return on equity (RoE) of 15.0% last year, compared to 16.2% in the previous period. At the same time, the company generated gross insurance sales of just under USD 45.6 billion - 3.9% more than in the previous year. While revenues in the largest line of business, property and casualty reinsurance (P&C), increased by just under 1%, life and health reinsurance (L&H) recorded growth of 3.8%. In regional terms, the USA remains the measure of all things. Swiss Re generated gross insurance sales of USD 18.2 billion in the States in 2024, accounting for just under 40% of total revenues.
Against this backdrop, it is not surprising that the severe weather catastrophes in North America are having an impact on the Group's income statement. Last year, hurricanes Debby, Helene and Milton in particular caused considerable damage. Together with other events, such as a severe hailstorm in Calgary, Canada, and Storm Boris in Europe, they caused the combined ratio in the P&C segment to rise by almost 5 percentage points to 89.9%. In the current year, the CEO would like to push this ratio back below 85%. The Group's profit is expected to increase significantly. Andreas Berger is forecasting a surplus of more than USD 4.4 billion. The return on equity should be more than 14% over the coming years and the dividend should continue to rise. For the period from 2025 to 2027, the management is holding out the prospect of an increase in profit sharing of 7% or more per year.
"All of our divisions have started 2025 in a strong position," said the Group CEO at the end of February. P&C has already completed a successful round of renewals. The division increased its premium volume by 7% and at the same time managed to push through price increases of 2.8% among customers. However, the devastating forest fires in Los Angeles in 2025 have already resulted in a serious loss event. According to Swiss Re, the insurance industry could face costs totaling around USD 40 billion. According to an initial estimate, the Group anticipates expenses of less than USD 700 million for its own business. At the end of 2024, the company held an investment portfolio worth more than USD 104 billion. Swiss Re generates a return on investment (ROI) of 4.0% from the capital allocated primarily to government and corporate bonds.
Even if Swiss Re has a less successful year, the new soft callable barrier reverse convertible could still offer an attractive return. The structured product yields a coupon of 7.20% p.a. irrespective of the further performance of the financial asset. The distribution is made quarterly. The nominal is partially protected: as long as Swiss Re does not fall to or below the barrier of 74% of the initial level, the issuer repays the capital investment in full. Even if this calculation does not work out, the maximum return of 7.20% p.a. is not necessarily lost. However, Swiss Re must terminate at or above the strike at maturity if the barrier is breached in order to achieve the optimum investment return. Otherwise there will be a discount or delivery of shares. Please also note the soft callable function. It makes early termination and redemption of this issue possible.
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