Swiss Re Slips To H1 Loss, Says Confident In Outlook; Stock Up

Reinsurer Swiss Re reported Friday a loss in its first half, compared to prior year’s profit, mainly reflecting claims and reserves related to COVID-19 outbreak. The results also were hurt by large natural catastrophe losses. Net premiums earned and fee income, however, increased from last year.

Looking forward, the company said it is confident in the outlook. Swiss Re shares were gaining around 2 percent in the current trading.

Swiss Re’s CEO Christian Mumenthaler said, “While the impact on our earnings is significant, it remains manageable as our operations continue uninterrupted, all our businesses are performing well and our capital position allows us to take advantage of attractive opportunities in an improving market.”

The company expects the claims and reserves it has booked in the first half of 2020 would cover the majority of its ultimate COVID-19 losses.

For the first half, net loss was $1.135 billion, compared to profit of $953 million in the previous year. The latest results reflected claims and reserves related to COVID-19 of $2.5 billion.

Excluding COVID-19 claims and reserves, net income was $865 million for the first half period.

In the Property & Casualty Reinsurance or P&C Re segment, net loss was $519 million on a reported basis, and $646 million excluding COVID-19 losses, compared to profit of $771 million last year. The weak results mainly reflected large natural catastrophe losses reported in the first quarter and the Calgary hailstorm in the second quarter.

In the Life & Health Reinsurance or L&H Re segment, net income was $74 million, including COVID-19-related claims and reserves of $548 million, driven primarily by higher mortality claims in the US and the UK versus expected levels. The prior year’s profit was $459 million.

The company’s first-half net premiums earned and fee income increased to $19.33 billion from $18.16 billion in the previous year.

P&C Re net premiums earned increased 10 percent from last year to $9.6 billion, due to large transactions and growth in natural catastrophe business, driven by successful renewals in the US and Asia.

L&H Re’s net premiums earned and fee income in the first half increased 6.2 percent year-over-year to $6.7 billion, supported by individual large transactions including longevity deals.

In Switzerland, Swiss Re shares were trading at 72.80 Swiss francs, up 2.22 percent.

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