Swiss Re has recently announced new financial objectives for the upcoming year as it prepares to report under the International Financial Reporting Standards (IFRS) starting in 2024. With a strong focus on the life and health business, the company aims to achieve a net profit exceeding $3.6 billion, with an expected contribution of $1.5 billion from this segment alone.
In terms of property and casualty reinsurance, Swiss Re is targeting a combined ratio below 87%. Similarly, for the corporate solutions business, the company aims to achieve a combined ratio below 93%. Both these figures indicate the company's commitment to maintaining a strong financial position and ensuring profitability in these sectors.
Furthermore, Swiss Re anticipates a return on equity of over 14%, demonstrating its dedication to delivering value to shareholders. This robust financial performance is expected to be facilitated by the adoption of IFRS accounting standards, which will accurately reflect the earnings potential of the life and health business and strengthen the overall balance sheet.
The transition to IFRS will also rectify previous accounting inconsistencies found under the US Generally Accepted Accounting Principles (GAAP) method. By doing so, Swiss Re expects to bolster its equity position, benefiting shareholders and enhancing confidence in the company's financial standing.
While striving for sustainable dividend growth, Swiss Re acknowledges that the implementation of a reserving uncertainty allowance for new business may have a negative impact on profit after tax in 2024, estimated at around $0.5 billion. This insurance practice involves setting aside funds to cover potential future claims and liabilities, ensuring responsible financial management and safeguarding against unforeseen risks.
In summary, Swiss Re's strategic objectives for next year reflect its dedication to profitability, shareholder value, and financial sustainability. With a clear focus on key business segments and the adoption of IFRS accounting standards, the company is positioning itself for continued success in the global insurance and reinsurance market.