Ladies and gentlemen, welcome to the first quarter 2021 media conference call. I am Alice, the Chorus Call operator. I would like to remind you that all participants will be listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Elena Logutenkova, Head of Media Relations and Corporate Reporting. Please go ahead, madam.
Good morning, everyone, and welcome to Swiss Re's first quarter results media call. I am Elena Logutenkova, Head of Media Relations and Corporate Reporting, and I'm joined today by our Group CFO, John Dacey, who will give you a brief overview of our key financial results, and then we'll take your questions. John, over to you.
Thank you, Elena. Good morning from my side, and thank all of you for joining the call this morning. As usual, I will briefly walk you through the highlights of the results. Our businesses delivered strong underlying performance in the first quarter, effectively absorbing the impacts from COVID-19 and a larger than expected natural catastrophe loss. In fact, on an underlying basis, and so excluding the COVID related impacts, we achieved the strongest first quarter results since 2016, with a net income of $843 million. In terms of the COVID-19 impact, P&C Re and Corporate Solutions saw losses decline sharply in line with our expectations. While we continue to see significant impacts on our life and health businesses in line with the tragic death toll from the pandemic. As you know, the number of deaths related to COVID-19 peaked in many countries at the beginning of this year.
For example, in the U.S., the seven-day average daily COVID-19 deaths stood at more than 3,000 in January and February. This has declined to about 700 as the end of last week. Thanks to our diversified business model, we effectively absorbed the heightened mortality impacts on our life and health business, and we maintained a very strong capital position. Our asset management team delivered a strong return on investments of 3.5% in the first quarter, driven largely by recurring income and supplemented by gains from equity valuations. As a result, the group reported a U.S. GAAP net income of $333 million in the first quarter.
This was after reserving $426 million of large natural catastrophe losses, mainly from U.S. winter storms in February, and underpins the ability of our Property & Casualty businesses to generate strong earnings while fulfilling our role as a shock absorber for the industry and for society. Let's have a quick look at some of our individual businesses. P&C Reinsurance delivered an excellent performance in the first quarter as a result of continued price improvements and disciplined underwriting. The business absorbed large natural catastrophe losses, primarily in the U.S. again, of $316 million, and reported a U.S. GAAP net income of $477 million in the quarter. Our strong focus on portfolio quality is driving profitability improvements, with P&C achieving an annualized return on equity of 21.6% and a combined ratio of 96.5%.
On a normalized basis, P&C Re is on track to reach the combined ratio estimate of less than 95% for the year. After our tactical adjustments in the January renewals, we are very pleased with the April renewals. P&C Re achieved a 20% increase in the volume of treaty contracts versus the business that was up for renewal in April, driven by attractive transaction opportunities. The nominal price increase of 4% more than offset the lower interest rates and the higher loss assumptions that were baked into this renewal. Life & Health Reinsurance continued to see significant COVID-19 related losses of $570 million, and reported a U.S. GAAP net loss of $184 million in the first quarter. As I mentioned before, this is primarily driven by the heightened mortality rates in the U.S. and other Western countries in the first quarter.
On an underlying basis, Life & Health Re maintained its strong performance with further improvements in the quality of its earnings. Excluding COVID-19, the business achieved a net income of $270 million and an ROE of 16.8% due to strong underwriting performance across all regions, as well as favorable investment results. Corporate Solutions maintains its positive momentum following the successful turnaround in 2020. For the first quarter, the business unit reported a net income of $96 million. The result benefited from disciplined underwriting, strict expense management, as well as continued rate increases. The strong pricing momentum we experienced in 2020 continued in the first quarter, and the business unit achieved a risk-adjusted rate increase of 13%. Despite higher than expected natural catastrophe losses, which amounted to $110 million for the quarter, Corporate Solutions combined ratio was 96%.
On a normalized basis, the business unit is on track again to reach its target combined ratio of less than 97% in 2021. Finally, let me give you a quick update on our digital white-labelling platform, iptiQ. Following the disbandment of the Life Capital business unit, iptiQ is now operating as a standalone division with its results reported as part of group items. In the first quarter, iptiQ continued its strong growth trajectory and reported 150% increase in gross premiums written for the core business as it expanded its property and casualty business in the EMEIA region. To sum up, we had a strong first quarter demonstrating the significant earnings potential of our diversified business model. We're particularly encouraged by the improving profitability trends in our property and casualty businesses, supported by the focus on portfolio quality and strong renewals.
With that, I'd like to hand it back to Elena for the Q&A.
Thank you, John. We'll now open the lines for questions. Operator, could we take the first question, please?
Anyone who has a question may press star and one at this time. The first question comes from the line of Tom Sims with Reuters. Please go ahead.
Good morning. It's striking that almost all of the COVID related impact in the first quarter was death related. If I read correctly, the $585 million in the first quarter compares with $912 million for all of last year. My question is the first quarter going to be the peak or are trends in places like India or elsewhere suggesting it may not be?
Tom, thanks for the question. To answer your question, I think it's important to remember that Swiss Re's economic exposure with respect to mortality risks is dominated by exposures in Western countries broadly and in the United States specifically. The vast majority of these losses for the entire pandemic have come from the United States, with some losses from the U.K. and other countries, but at a much smaller rate. We have small exposures, truly small exposures in emerging markets like India, almost nothing in Latin America. To your specific question, yes, the losses in the first quarter of 2021 were very significant for mortality. That's consistent with it being the worst quarter for mortality deaths related to COVID in the United States and in the United Kingdom.
We would expect our economic losses based on what we know today to improve considerably in future quarters, thanks to the aggressive rollout of vaccines in those two markets. We've seen the death rates drop, as I mentioned, from more than 3,000 per day in the U.S. identified COVID-19 losses to under 1,000, probably now under 700 per day here at the end of April. I think, we believe with our portfolio this has in fact peaked. The vaccines are having their impact of bending the curve with related deaths aggressively down. As a result, while the losses won't go to zero for us, they will be significantly below where they were here in the first quarter.
Thank you.
Thanks, Tom. Let's take the next question, please.
The next question comes from the line of Ben Dyson with S&P Global Market Intelligence. Please go ahead.
Hi, good morning. Yeah, just a quick one really on the coronavirus loss numbers in the table at the bottom. There's a couple of negative figures in there this time around. Minus seven for Corporate Solutions and event cancellation and minus four in credit insurance for P&C Re. Is that basically Swiss Re releasing reserves there? Could you say a little bit about why you feel comfortable to do so?
Sure, Ben Dyson. On every quarter, we've got an elaborate process that's been put in place precisely for the COVID-19 losses to try to evaluate exactly what our losses have been for that quarter as well as some indications of what we expect coming forward. On the event cancellation, as you say, it was a release of $7 million for credit insurance and P&C Reinsurance of $4 million. What I can suggest is that we booked reserves in the fourth quarter based on what we understood to be a loss that on the events that did not occur because of the pandemic. The total cost of those events has been mitigated by the event organizers spending less money. While we might have put up the initial reserve on our total exposure, for example, the actual claim came in lower than that.
That's where you see these modest adjustments. In general, the overall exposure that we've got in both our P&C Re business and Corporate Solutions is a fraction of what we had a year ago, in part because of the restrictions we put on the policies that exclude the kinds of infectious diseases like COVID on a going forward basis. Whether it was in the January one renewals or even renewals done during the course of last year, it's reduced our exposure to these risks independent of the path of the pandemic going forward. Okay,
thank you very much.
Thank you, Ben. Let's take the next question, please.
As a reminder, if you wish to register for a question, please press star and one on your telephone. Star followed by one. There are no more questions at this time.
All right. Thank you very much all for joining us this morning. If you have any further questions, do let us know.
Sorry to interrupt.
Oh.
We have a last-minute registration from Rachel Dalton with Insurance Insider. Please go ahead.
All right. Okay.
Hi, thanks for taking my question. You noted quite a big expansion in top line at the April renewals. I wondered if you could just give us a little bit more color around the opportunity that you see there. Thank you.
Sure, Rachel. Happy to. The number did increase materially 20% on what was up for renewal. A couple thoughts. First, the April renewals are smaller in absolute size, considerably smaller than what we would have done in January. This is not the same impact on the overall portfolio. What we include in these renewals is on treaties where we've had, in this specific case, transactions with an individual client with a substantially increased dimension of cover. These transactions sometimes are chunky, sometimes they fit into the renewals, sometimes they're independent of the renewals. In this case, it was part of the April renewal. That's what drove the majority of this major increase along the way.
What I can say is with that increase, compared to the decrease that we reported on January one, where we took the tactical actions of reducing, again, our U.S. casualty exposure as well as some property covers with respect to aggregates and lower attachments in some of our excess of loss treaties. This +20% in April brings us on a year-to-date basis at -3 overall for the renewals. That compares to the -11 that we had on January one. We try to explain to people that we did not expect to continue a major shrinkage for the year. In fact, the April renewals reiterates the fact that we do see opportunities for growth.
For the first quarter, the premiums earned actually were up 6.5% at the group level for P&C Re, a little more than 5% because of the strong growth that we had in 2020, earning through in the first part of 2021 as well. I think we just saw interesting prices, an ability to work on these transactions with specific clients and took advantage to book the premiums as part of that renewal.
Okay, great. That's helpful. Thank you. Just to clarify, what kind of geography are we talking about at one for? Can you give us a rough proportion for where in the world you're renewing these contracts?
Yeah. The April one renewals are typically dominated by Japan, where our major Japanese clients. In this case, there's also some important business renewed in the United States as well with a couple clients.
Great. Okay. Thank you.
Thanks, Rachel. Do we have any further questions?
Once again, to ask a question, please press star and one on your telephone. Star followed by one.
If not-
There are no more questions.
Well, thank you all for your participation, and enjoy the rest of your day and your weekend.
Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Bye-bye.