Swiss Re has banked a 22% increase in first-quarter net profit to $US158 million ($178 million), despite the effect of heavy catastrophe losses.

The Chilean earthquake combined with European winter storm Xynthia to drain earnings, with operating profit of $US259 million ($293 million) well down on the $US846 million ($957 million) earned in the first quarter of last year.

Swiss Re expects to drop a further $US200 million ($226 million) on the recent Deepwater Horizon oil rig explosion.

As a result of natural catastrophe activity, the combined ratio has deteriorated heavily to 109.4% from 90.2%.

Growth was generally flat across Swiss Re’s life and health and asset management portfolios, with profit of $US245 million ($277 million) and $US937 million ($1.06 billion) respectively.

However, shareholder equity was buoyed by mark-to-market gains on fixed income securities of $US1.1 billion ($1.2 billion) during the period.

“While natural catastrophes can contribute to earnings volatility, protecting our clients against such extreme events is the essence of our business model,” CEO Stefan Lippe said.