Swiss Re announced a net income of $1.5 billion for the first quarter of 2026, marking a 19% increase from the prior year's $1.275 billion and significantly surpassing the analyst consensus of $1.19 billion by approximately 27%. This performance, coupled with earnings per share of $5.11, which exceeded estimates by 28%, positions the company well towards its full-year profit target of $4.5 billion. CEO Andreas Berger highlighted disciplined underwriting and cost efficiency as key drivers, emphasizing the P&C businesses' focus on quality over volume in an uncertain macroeconomic climate.
Despite the strong financial results, Swiss Re's stock experienced a 2.2% drop following the report. This market reaction was partly due to concerns regarding a nearly 9% decline in insurance revenue to $4.1 billion from $4.5 billion, and a 29% decrease in new business contractual service margin (CSM) to $1.0 billion from $1.4 billion. Analysts noted that while current profits were robust, the reduction in new business suggests a potentially thinner future earnings stream, reflecting Swiss Re's strategic decision to reduce natural catastrophe volumes by 11% and walk away from less profitable deals.
At the April reinsurance renewals, Swiss Re saw an 8% decrease in premium volume and a nominal price decrease of 2.5%. After accounting for increased loss assumptions of 3.6%, the net price decrease was 6.1%. The P&C Re segment's net income increased 43% to $754 million, with the combined ratio improving to 79.5%. Favorable natural catastrophe losses totaled $133 million against a budget of $409 million, and reserve releases contributed approximately $450 million. CFO Anders Malmstrom clarified these reserve releases as structural.
Looking ahead, Swiss Re aims to achieve its $4.5 billion profit target for the current year. The company plans a share buyback worth $1.5 billion in 2026 and intends to propose a 9% higher dividend of $8 per share. The management reiterated its commitment to prioritizing portfolio quality and disciplined underwriting, even in a more competitive pricing environment, signaling a strategic pivot towards profit over premium volume.
