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July 3 (Bloomberg) -- Swiss Re Ltd., the world’s second- biggest reinsurer, said it expects to meet a profitability target for next year after improving the performance of its life and health unit.
Swiss Re is “confident” it will reach a return on equity goal of 10 percent to 12 percent by 2015, the company said in statement before a meeting with investors in London today.
The 150-year old reinsurer reported the biggest drop in earnings of all European reinsurers in the first three months after declines in life reinsurance revenue. The company, which is targeting an average annual increase in earnings per share of 10 percent by 2015, is revamping its life and health unit, the least profitable of its businesses last year.
Measures to increase profit, which include renegotiating the terms of underperforming U.S. investments, are meant to double the return on equity for life and health to between 10 percent and 12 percent by next year and will cost about $500 million before tax this year, Swiss Re said earlier.
The company said today it’s dividend and capital management policies will remain unchanged. Chief Executive Officer Michel Lies said new financial targets for 2016 onward, to be announced in February, will focus on profitability, capital management and growth.
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