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In the summer, Swiss Re was able to significantly contain the huge losses caused by the corona pandemic. After nine months, the deficit is $ 691 million.
By the middle of the year, the traditional company had reported a loss of $ 1.1 billion. The recovery succeeded the second largest reinsurer in the world thanks to a profit of 444 million dollars in the third quarter, it announced this Friday.
Swiss Re has set aside another $ 428 million for claims and provisions per crown. Overall, crown claims and provisions since the beginning of the year now total $ 3 billion.
Without this pandemic damage, the group would have made a profit of $ 1.6 billion in the first nine months, Swiss Re wrote in a statement Thursday. This would have exceeded the previous year’s profit of $ 1.3 billion. They did well in the financial markets and achieved a solid investment result.
Exceeded expectations
With the numbers, Swiss Re has performed significantly better than the financial community expected. This pleased investors: Until shortly before noon, the stock was the best stock in the large corporation index (SMI) on the weakest Swiss stock exchange with a 2.2 percent lead.
A third of the total $ 3 billion crown damage was caused by business disruptions, Swiss Re said. $ 681 million went to the event cancellations account. Life insurance reinsurance gobbled up almost as much due to the numerous corona deaths in the United States and Britain.
“In view of developments in the meantime, we are convinced that our standby approach remains appropriate and reflects the ongoing uncertainties caused by the pandemic,” said Chief Executive Christian Mumenthaler.
The reinsurer explained that 67 percent of these losses are provisions for losses that have occurred but have not yet been reported: However, there is still a high level of uncertainty regarding the pandemic. This means that actual losses in the coming quarters could deviate positively or negatively from Swiss Re’s estimates.
“But that is not over, it is not over for us, it is not over for the industry,” CFO John Dacey said on a conference call. There will be more crown damage and deaths.
Unusually many natural disasters
At the same time, there were an unusually large number of natural disasters, which together with man-made disasters caused $ 1.5 billion in damage in the first nine months. The culprits were, among others, hurricanes “Laura” and “Sally”, wildfires and storms in the United States, as well as floods in the Yangtze in China and Typhoon Haishen.
The biggest man-made disaster was the explosion in the port of Beirut, causing damage estimated in the tens of billions. At Swiss Re, it reached $ 222 million, as Dacey said.
The group made progress with the recovery of their troubled son. The main insurance business of the big companies (Corso) would have made a profit of 211 million dollars without the damage of Coronas.
About half of the crown damages in the division are provisions for cancellation of events, an area of business that Corporate Solutions left in 2019. The remainder is related to explicit coverage of independent business interruptions of property damage and damages in the credit and surety business.
Without foresight
For the entire financial year, CFO Dacey did not want to give a forecast. He was unable to predict the development of the pandemic and the control measures taken by the authorities. “We are doing everything possible to repeat the profit of 444 million in the third quarter. We’ll see where we land on December 31st. “
