Swiss Re losses narrow on 'strong' Q3 but COVID-19 reserves rise to $3bn
Zurich-based global reinsurer Swiss Re narrowed its nine-months loss with strong performance in its property/casualty reinsurance division and improvements in its corporate solutions business, despite making future additions to its COVID-19 loss reserves.
Chief executive Christian Mumenthaler highlighted "strong capital position" and improving pricing conditions in the P&C market as cause for optimism, despite the uncertainty surrounding many factors related to the pandemic. While chief financial officer John Dacey stated that Swiss Re is strongly positioned to capture attractive opportunities in upcoming renewals and deliver on its financial targets.
The reinsurer reported that its net loss narrowed to $691 million for the first nine months of 2020, as Swiss Re achieved net profit of $444 million in Q3. The third quarter result was driven by improved market conditions and demand for large transactions.
Swiss Re made further additions to COVID-19 reserves in the third quarter, bringing the total amount to $3 billion at the end of the nine-month period. Excluding COVID-19 claims and reserves, its group net income amounted to $1.6 billion for the nine-month period.
The group's property & casualty reinsurance division reported a nine-month net loss of $201 million, but losses narrowed as results in the third quarter benefited from strong recent renewals.
P&C Re combined ratio came at 110.3 percent and net premiums earned increased by 9.2 percent to $15.5 billion in the nine-month period.
Swiss Re's corporate solutions business continued the execution of its turnaround plan. The closing of the ReAssure sale to Phoenix Group resulted in a $1.5 billion dividend to the Group.
Corporate Solutions reported a net loss of $323 million, compared with a net loss of $441 million in the first nine months of 2019.
Net profit in the life & health reinsurance plummeted to $72 million, compared with $651 million in the same period a year ago.
Mumenthaler said: "Our businesses are delivering a positive underlying performance, and we are confidently executing on the Group’s priorities in improving market conditions."
“Swiss Re is well-equipped to benefit from an improving market environment. Our capital position is very strong, allowing us to pursue profitable growth as prices develop favourably across both our P&C Re and Corporate Solutions businesses. We are confident that we can continue to support our clients with risk knowledge, capital strength and tailored solutions in these unprecedented times."
Dacey added: “We continue to be focused simultaneously on managing all dimensions of the COVID-19 crisis while delivering on business priorities and pursuing promising new ventures. Thanks to Swiss Re’s industry-leading capital strength and risk knowledge, we are strongly positioned to capture attractive opportunities in upcoming renewals and deliver on our financial targets over the business cycle."
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