Property & Casualty Reinsurance


Net income for 2015 was USD 3.0 billion. The result reflected solid underwriting results supported by benign natural catastrophe experience and net reserve releases from prior accident years. The overall result was impacted by a large man-made loss burden, notably the explosion in Tianjin, China, estimated to impact the property and marine business lines by USD 235 million.

The combined ratio was slightly higher at 86.0%, compared to 83.7% in 2014.

The underwriting result for 2015 decreased by USD 433 million largely due to the impact of foreign exchange rate movements and lower prices for reinsurance. This also reflects a shift towards more proportional business and more casualty business, both of which typically result in a higher combined ratio. These shifts were partly offset by better than expected natural catastrophe experience and positive prior-year development.

Major natural catastrophes in 2015 included storms on Australia’s east coast, storm Niklas in Europe, a sandstorm in Saudi Arabia, and floods in India and the UK in December. Large man-made losses included the explosion in Tianjin, China, a fire on an oil platform in the Gulf of Mexico, a dam burst in Brazil, a credit loss in India, an engineering loss in France and a fire at a South Korean warehouse.

Property & Casualty results


USD millions



Change in %

Premiums earned

15 598

15 090










Claims and claim adjustment expenses

–8 493

–7 892


Acquisition costs

–3 382

–3 836


Other expenses

–1 175

–1 247


Total expenses before interest expenses

–13 050

–12 975






Underwriting result

2 548

2 115






Net investment income

1 076

1 097


Net realised investment gains/losses




Other revenues




Interest expenses




Income before income tax expense

4 137

3 440


Income tax expense




Income attributable to non-controlling interests




Interest on contingent capital instruments




Net income attributable to common shareholders

3 564

2 977






Claims ratio in %




Expense ratio in %




Combined ratio in %




Net premiums earned

Premiums earned by line of business, 2015

(Total: USD 15.1 billion)

Premiums earned by line of business, 2015 (pie chart)

Net premiums earned were USD 15.1 billion in 2015, compared to USD 15.6 billion for 2014. The decrease was mainly driven by foreign exchange rate movements. At constant exchange rates, premiums earned increased by USD 497 million, driven by increased premiums in casualty and specialty, partly offset by decreases in property.

The composition of gross premiums earned by region changed year on year, with the Americas having a higher share of premiums in 2015 compared to 2014. The balance between proportional and non-proportional reinsurance business moved towards proportional business in 2015. Based on gross premiums written before intra-Group retrocession, the share of proportional business was 69% in 2015, compared to 64% in 2014.

Combined ratio

Property & Casualty Reinsurance reported a solid combined ratio of 86.0% in 2015, compared to 83.7% in the previous year. Both periods benefited from a better than expected natural catastrophe experience and favourable prior-year reserve developments.

The impact from natural catastrophes in 2015 was 8.7 percentage points below the expected level of 9.9 percentage points. Favourable development from prior accident years improved the 2015 combined ratio by 5.1 percentage points compared to 3.9 percentage points in 2014.

Administrative expense ratio

The administrative expense ratio increased to 8.3% in 2015, compared to 7.5% in 2014. The prior year ratio benefited by one percentage point due to a release of a premium tax provision in Asia in the third quarter of 2014.

Lines of business


The property combined ratio was 73.1% in 2015, in line with 69.7% in 2014, supported by benign natural catastrophe loss experience and favourable prior-year claims experience.


The casualty combined ratio for 2015 was 99.9%, compared to 104.1% in 2014. This is mainly due to higher net reserve releases compared to last year.

Specialty lines

The specialty combined ratio increased to 80.5% in 2015, compared to 68.1% in 2014, reflecting the impact of the explosion in Tianjin, China, and significantly lower net reserve releases compared to 2014.

Investment result

The return on investments for 2015 was 3.5% compared to 3.7% in 2014, reflecting a decrease in the investment result of USD 212 million. The decrease was driven by reduced net realised gains from the sale of equity securities in the current period.

Net investment income increased by USD 37 million to USD 1 036 million in 2015, mainly due to additional income from duration lengthening in the second half of 2014 as well as in 2015.

Net realised gains were USD 497 million in 2015 compared to USD 730 million in 2014, as the prior period included additional gains from the sale of equity securities and alternative investments, which were partially offset by additional gains from the sale of government bonds in the current period.

Insurance-related investment results are not included in the figures above.

Shareholders’ equity

The return on equity for 2015 was 22.2% compared to 26.7% in 2014, mainly due to lower earnings in 2015. Common shareholders’ equity for the business segment was USD 13.0 billion at the end of 2015 compared to USD 13.9 billion at the end of 2014. The decrease was driven by dividend payments to the Group, unrealised losses and lower 2015 net income.


Price erosion due to abundant capital and low loss occurrence continues for property, except for some loss-affected programmes. For special lines, rates are also under pressure, with significant differences by markets and lines of business. Casualty markets also saw rate decreases but overall remain more stable, with significant differences by segment.

Successful differentiation will remain the key for new business wins, large and tailored transactions and differential pricing.

Our differentiation strategy is successful and well-acknowledged by our clients. We continue to execute this strategy while focusing on the bottom line in a softening market environment. We will reduce capacity for flow business and focus on large and tailored transactions.