Swiss Re net profits up sharply

Reinsurance giant Swiss Re shrugged off natural disasters to report net profits of $2.6 billion for 2011 on Thursday, up sharply from the $863 million recorded the previous year and higher than analysts had expected. Net profits for the fourth quarter alone came to $983 million (741 million euros) against a loss of $725 million over the same period in the previous year, the company reported. The result is much higher than the $1.8 billion annual profit anticipated by analysts surveyed by financial analysts AWP. Premiums for their part, increased by only eight percent to $21.3 billion over the period. Natural disasters such as Japan's earthquake and tsunami and the earthquake in New Zealand, floods in Australia and Thailand, as well as hurricanes in the United States impacted the firm's performance. Operating income in the property and casualty sector was down 48 percent, or $1.3 billion on the previous year. Given the increase of natural disasters, the combined ratio, which measures the ratio between operating expenses and claims costs relative to premium income, worsened by 7.7 percentage points to 101.6 percent. The group expressed optimism for the new year with a 20 percent increase in premiums in January. With its strong results, Swiss Re will offer its shareholders a dividend of 3 Swiss francs per share, against 2.75 Swiss francs in 2011.