Swiss Re’s Group Chief Executive Officer Christian Mumenthaler said: “The first nine months of this year were marked by a confluence of events affecting Swiss Re’s financial performance: from turbulence in the financial markets, to an increase in natural catastrophe claims, surging inflation and the war in Ukraine. While P&C Re has been significantly affected by these headwinds, all other businesses are performing well and are on track to reach their 2022 financial targets.”
Zurich:
Swiss Re, the second largest global reinsurer, said Friday that claims related to Hurricane Ian in the U.S. drove it to a third-quarter loss as its property & casualty business suffered.
The Zurich-based reinsurer said it made a loss of $442 million in the three months to the end of September, from a profit of $212 million in the same period last year.
In preliminary results, Swiss Re said it expected a net loss of around $500 million.. The decline was mainly driven by significantly lower investment results, large natural catastrophe claims of $ 2.7 billion as well as first-quarter reserves of $283 million related to the war in Ukraine.
Its property & casualty segment was particularly harshly hit, registering a net loss of $599 million for the period.
The company previously flagged claims from Hurricane Ian, which struck Florida and neigbouring states, at around $1.3 billion, and said it had been affected by an increase in small- and mid-sized claims in the third quarter.
Swiss Re’s Group Chief Executive Officer Christian Mumenthaler said: “The first nine months of this year were marked by a confluence of events affecting Swiss Re’s financial performance: from turbulence in the financial markets, to an increase in natural catastrophe claims, surging inflation and the war in Ukraine. While P&C Re has been significantly affected by these headwinds, all other businesses are performing well and are on track to reach their 2022 financial targets.”
Swiss Re’s Group Chief Financial Officer John Dacey said: “We have bolstered reserves by $ 0.7 billion over the past 12 months to address the impact of economic inflation. Rising interest rates are already helping to compensate for this impact, with the recurring contribution from our fixed-income portfolio rising by around USD 100 million in the third quarter alone. Most importantly, despite the challenges this year, we have maintained our very strong capital position and remain committed to our capital management priorities.”
The company’s life & health and corporate-solutions business continued to deliver strong results, Swiss Re said, with profits of $219 million and $136 million, respectively.
Return on equity was minus 13.2% in the quarter, and return on investments was 2.4%, hit by negative mark-to-market impacts.
Outlook
As disclosed on 18 October 2022, Swiss Re is unlikely to reach its Group ROE target of 10% in 2022.
Mumenthaler said: “While we are disappointed that the Group ROE target is unlikely to be reached this year, we remain confident in our mid-term outlook. In this volatile environment, risk aversion and the need for protection will continue to increase. Our strategy and very strong capitalisation put us in a favourable position for the upcoming renewals amid rising prices and constrained market capacity.”