Swiss Re reported net income of $2.6 billion for 2011 today, noting that a low tax rate coupled with a strong underlying performance contributed to its results.
Shareholder’s equity rose by $4.3 billion compared to 2010 precipitated by a healthy Group result and $3.2 billion increase in unrealized gains that can be attributed to declining interest rates on government bonds.
But the big news was a nearly 43% drop in its life & health operating income, which fell to $464 million from $810 million the previous year. The insurer said the drop was in response to financial market volatility and increased cost in Admin Re, a solution where in which Swiss Re acquires closed blocks of in-force life and health insurance business and assumes responsibility for administrating the underlying policies.
The increased costs in Admin Re pertain to a strategic realignment where Admin Re will be split into three separate units, Admin Re, Corso and Swiss Re.
Swiss Re’s strongest aspect of business was asset management with an operating income of $5 billion compared with $4.5 billion where year ago. They also reported a 5.1% ROI compared to 3.5% last year. Total return on investments including unrealized gains and losses went from 6.5% in 2010 to 9.7% in 2011.
“With a successful year behind us and a modest but broad market turn underway, Swiss Re is well positioned to perform and grow in a low yield environment,” said Swiss Re CEO Michel M. Lies.