The FINANCIAL — According to Dow Jones, Swiss Reinsurance Co. (RUKN.VX) on September 7 said it aims to preserve its margins in upcoming contract renewal negotiations, preferring profitability over volume growth.
Challenges such as a surge in inflation and an active hurricane season would have an impact on pricing, the company said, setting the stage for upcoming price negotiations, the so-called January renewals.
Swiss Re, the world's largest reinsurer in terms of premiums, typically renews nearly two-thirds of its portfolio in January.
According to Dow Jones, the company said it remains committed to disciplined underwriting, a business strategy aimed at keeping profit margins high. Swiss Re plans to stick with this practice "even if it means lower volume," it said.
The company said it expects reinsurance rates to continue to slide in most markets and lines of business although at a slower pace compared with last year.
Swiss Re said it sees opportunities in areas such as aviation or engineering.
Inflation is a growing concern. Consumer prices are up by more than 4% year-on-year in the U.S. and in some European countries, and by a double-digit figure in many emerging markets, the company said
"If inflation stays elevated for an extended period, it may generate additional losses, reducing the insurance industry's capital base," Swiss Re said.
Swiss Re shares have lost 19% so far this year. They closed at CHF65.20 on September 5.
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