Swiss Re will divert more capital to the property and casualty business as rates firm, according to Chairman Walter Kielholz.

Last year’s $US4.2 billion ($4.03 billion) record profit came despite a difficult environment, he says in the group’s annual report.

“Low interest rates are a challenge for all our business lines.”

He says regulatory changes in various jurisdictions will have a cumulative impact this year, particularly on systemically important global insurers.

The world economy is expected to be less turbulent, with the US and European economies improving slightly and growth in emerging markets remaining robust, according to Mr Kielholz.