Life & Health Reinsurance

Net income was USD 761 million for 2018, a decrease from the previous year’s net income of USD 1.1 billion. The 2018 underwriting result was mainly driven by large transactions in Canada and New Zealand, as well as improved performance in Asia and EMEA, partly offset by unfavourable mortality experience in the US. Investment results were lower than in the prior year, reflecting lower realised gains and mark-to-market losses on equity securities. The return on equity was 11.1%, compared to 15.3% in 2017.

Life & Health results


USD millions



Change in %





Gross premiums written

13 313

14 527


Net premiums written

11 826

12 647


Change in unearned premiums




Premiums earned

11 851

12 683


Fee income from policyholders




Net investment income – non-participating business

1 308

1 305


Net realised investment gains/losses – non-participating business




Net investment result – unit-linked and with-profit business



Other revenues




Total revenues

13 963

14 455










Life and health benefits

–9 211

–10 280


Return credited to policyholders




Acquisition costs

–2 064

–2 045


Operating expenses




Total expenses before interest expenses

–12 148

–13 088






Income before interest and income tax expense

1 815

1 367


Interest expenses




Income before income tax expense

1 500



Income tax expense




Net income before attribution of non-controlling interests

1 140



Income/loss attributable to non-controlling interests




Net income after attribution of non-controlling interests

1 140



Interest on contingent capital instruments, net of tax




Net income attributable to common shareholders

1 092







Management expense ratio in %




Net operating margin in %





Premiums earned by line of business, 2018

Total: USD 12.7 billion

Life & Health Reinsurance – Premiums earned by line of business, 2018 (bar chart)

Net premiums earned and fee income in 2018 increased by 7.1% to USD 12.8 billion, compared to USD 12.0 billion for the prior year. Gross premiums written increased by 9.1% to USD 14.5 billion, reflecting growth across all markets, including a large transaction in Asia, a positive impact of intra-group retrocession agreements and favourable currency fluctuations. At constant exchange rates, the increase amounted to 8.1%.

Net operating margin

The net operating margin for 2018 was 9.4%, a decrease from 13.1% in 2017 due to lower investment and underwriting performance.

Management expense ratio

The management expense ratio was 5.4%, a decrease from 5.7% in 2017, driven by higher premium volumes.

Lines of business

Income before interest and income tax expense (EBIT) for the Life segment decreased to USD 720 million for 2018, from USD 935 million in the prior year. The results in 2018 were adversely impacted by unfavourable mortality experience in the US individual life business, partly offset by a transaction in Canada.

EBIT for the Health segment slightly increased to USD 355 million for 2018 from USD 345 million in the prior year. The 2018 result included unfavourable valuation updates in the health portfolio in Australia. The prior year included an increase in incurred but not reported (IBNR) claims in the UK critical illness business.

Investment result

The return on investments for 2018 was 3.7%, compared to 4.3% in 2017, reflecting a decrease in the investment result of USD 244 million.

Net investment income increased slightly by USD 23 million to USD 1 128 million in 2018. The fixed income running yield for 2018 was 3.4%.

Net realised gains were USD 192 million for 2018, compared to USD 459 million for the prior period, with the prior period positively impacted by significant net realised gains from sales of equity securities.

Insurance-related investment results as well as foreign exchange gains/losses are not included in the figures above.

Shareholders’ equity

Common shareholders’ equity decreased to USD 6.3 billion as of 31 December 2018 from USD 7.5 billion as of 31 December 2017. The decrease of USD 1.2 billion reflects a change in net unrealised gains and the dividends paid to the Group, partially offset by net income for the period.

Return on equity was 11.1% in 2018, compared to 15.3% in 2017.


We expect life and health treaty reinsurance business to grow modestly in mature markets compared to a stronger increase in high growth markets. In mature markets, the prolonged low interest rate environment continues to have an unfavourable impact on long-term life business. Cession rates are expected to be broadly stable in major markets. We see a continued strong focus on capital, risk and balance sheet optimisation in mature markets, leading to ongoing opportunities for large transactions.

We will continue to pursue growth opportunities in high-growth markets and in large transactions, including longevity deals. We are responding to the expanding need for health protection driven by ageing societies and we will apply our risk knowledge experience to help reduce the protection gap in all regions.