Swiss Re disappointed some analysts by announcing a 2026 net profit target of $4.5 billion. Andreas Berger, the reinsurer’s group chief executive, has since stressed the importance of timing growth and avoiding temptations.
This morning, the global reinsurer confirmed and raised a number of targets for next year, including net profit of $4.5 billion, which is higher than the $4.4 billion forecast for 2025 but lower than some industry analysts expected.
In light of this, in a recent management conversation with analysts, CEO Berger stressed that market conditions were tough, but added that the outlook was positive, focusing on Swiss Re’s strength and resilience.
Berger’s opening remarks focused on the temptations in the current market landscape, specifically the temptation of growth.
“Right now, everyone thinks we have to grow. There’s too much opportunity, there’s too much demand in the market, so let’s grow. Unfortunately, in our industry, it’s a disaster. I’ve been through many, many cycles… The characteristics are always the same. People come into the market and grow at the wrong time, and I’ve seen this movie before… So, we have to be very conscious about this,” he said.
The CEO went on to stress that he was “not here to squeeze lemons” but “to build a lemon tree.”
“It’s not about squeezing lemons. It’s about long-term stability, resilience, it’s about delivering results and consistency year in and year out. If one gets too excited, if people think there are opportunities out there that we need to chase, then you can’t achieve that.
“But on the other hand, I’m not going to be intimidated by what people say about market and interest rate developments. That’s cycle management. That’s normal. So we have to grow and do things the right way in every part of the cycle. That’s our job,” Berger added.
The CEO has reiterated multiple times that $4.5 billion is a good and attractive number in the current market environment, as it equates to a return on equity (ROE) of about 20%.
“So, this is a very good result. Could we have done more? Maybe. But again, remember, I don’t want to squeeze a lemon. We need some dry powder to further solidify our position in the market,” Berger said.
Later adding: “I think that’s what we’re trying to say, we want to generate over 14% ROE over the cycle because there may be parts of the business over the cycle that don’t generate 20% ROE and history tells you that.
“So what we’re trying to do is manage expectations and give us options and room to really deliver on the consistent goals that we committed to. So $4.5 billion is good, especially when you think about the property and casualty business that’s under pressure, because we have a sizeable portion of the property and casualty business on our books that needs to be managed. I’m not saying I’m pessimistic about it, I’m not intimidated, but we need to be proactive in managing it.”