Swiss Re reported a decline in first-half earnings as the claims from the damage wreaked by Cyclone Debbie in Australia continued to weigh on the world’s second-largest reinsurer.
The Zurich-based reinsurer Swiss Re said Friday net income fell to $1.21 billion in the six months through June, down from $1.87 billion in the year earlier period, missing analysts forecast for earnings of $1.38 billion.
Swiss Re said the major impact on its earnings came from claims totaling $360 million in the aftermath of the damage caused by the cyclone which hit parts of Australia in March.
With premiums steady at $16.2 billion, Swiss Re said the market environment remains challenging although results were supported by a solid underwriting performance and strong investment results.
Gross Premiums Drop
Gross premiums in the key property and casualty reinsurance business dropped almost 16 percent to $9.4 billion, resulting from a drop in capacity where prices failed to meet its profitability expectations, it said.
Swiss Re also reported a first-half decline in its life and health reinsurance and corporate solution division, while the life capital unit managed a 5.2 percent rise to $932 million.
Well Positioned
The reinsurer’s asset portfolio generated an annualised 3.5 percent return on investments, compared with 3.7 percent a year earlier. Shareholder equity was steady at $34.4 billion.
Chief Executive Christian Mumenthaler said results were «solid» despite the difficult market conditions, and that the reinsurer remains well positioned to weather further headwinds while focusing on its capital management priorities.
