Swiss Re is looking back on a year where natural catastrophes led to an avalanche of claims. And yet it earned more than analysts had expected, because of the good work of one division.

The world’s second-largest reinsurer had net income of $331 million in 2017, the company said in a statement today. In 2016, Swiss Re’s profit had amounted to $3.56 billion. Analysts on average expected profit of only $110 million.

The figures included combined estimated claims from large natural catastrophes of $4.7 billion, resulting from damages through cyclone Debbie, hurricanes Harvey, Irma and Maria, the earth quake in Mexico and forest fires in California.

The claims dented the result of the Property & Casualty Reinsurance (P&C Re) as well as Corporate Solutions units. P&C Re had a loss of $413 million and Corporate Solutions reported a loss of $741 million.

Strong Investment Performance

Life & Health Reinsurance (L&H Re) by contrast returned a profit of $1.1 billion, up from $807 a year earlier. The result was driven by a stable underwriting result and strong investment performance, which generated an annualized return on equity of 15.3 percent, according to the Zurich-based company.

Despite the heavy claims of last year, Swiss Re has still a very strong economic solvency, which is «comfortably» above the group’s respectability level of 220 percent, the company said.

The board of directors proposes to increase the dividend to 5 francs per share from 4.85 francs and will ask shareholders to launch a new public share buy-back program of as much as 1 billion Swiss francs.

Outlook

«We believe the outlook for our industry is now more positive than it has been during the last four years,» said Swiss Re CEO Christian Mumenthaler in the statement. «Changes in the market environment, such as adjusting property and casualty price levels and increases in interest rates, are expected to be beneficial for our business.»

Swiss Re reiterated its earlier statement about the discussions with Softbank. The Japanese tech firm is interested in buying a minority stake of as much as 30 percent in the Swiss company. Taking reference to these discussions, Swiss Re also said that its capital position remained very strong and that the issuance of new capital was not under consideration.