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ZURICH, Dec 2 (Reuters) - Swiss Re on Friday reaffirmed its financial targets and said it would focus on using research and development to access new growth areas in a challenging environment.
The world's second-biggest reinsurer has said it is targeting a return on equity of 700 basis points above risk-free 10-year U.S. government bonds and aims to grow economic net worth per share by 10 percent each year.
It aims to raise its regular dividend along with long-term earnings or at least maintain it.
"We acknowledge significant challenges in some of our markets but we remain optimistic for our industry in the long term," Chief Executive Christian Mumenthaler said.
"In the current environment, it is absolutely essential that we focus on what we do best: leverage our capability to price risk and allocate capital to those opportunities that are most attractive."
By focusing on R&D and technological investments and by allocating capital to the most attractive, growing risk pools, it aimed to differentiate itself from peers, a strategy that had let it generate higher margins and outperform other reinsurers.
Swiss Re's targets -- formulated last year -- are set through the insurance cycle, which it has said can typically last for five to 10 years. New targets were set from 2016 onwards.
Contract renewals in January will provide an important signal whether a softening cycle, characterised by falling prices amidst fierce competition and low global interest rates, has finally bottomed out. (Reporting by Brenna Hughes Neghaiwi; Editing by Michael Shields)