New chief executive explains why world’s largest reinsurer had challenges in second quarter results
Swiss Re slumped to an underwriting loss in the second quarter, posting a 101% combined ratio compared to 92.9% a year ago.
Net income declined to $637m compared to $820m a year ago - but beat the $605m average of analysts estimates carried out by Bloomberg.
Chief executive Christian Mumenthaler said the second quarter was “was marked by a difficult macroeconomic environment as well as more pronounced natural catastrophe losses and large reported claims in our Corporate Solutions business unit.”
Mumenthaler took over at the start of this month from the retired Michel Lies.
The reinsurer’s property casualty unit had the biggest drop in income, falling 39% to $283m.
Swiss Re expects a $220m loss alone from the Alberta fires in May.
Other claims include storms in Europe and America, in addition to an earthquake in Japan.
However, the reinsurer stressed claims losses were not out of line with ten year averages.
The reinsurer has been moving its investment portfolio into corporate bonds to escape the low interest returns on government debt.
When looking at the whole year in total, profit for the first six months fell to $1.87 billion, from $2.26 billion a year ago.