Hurricanes in the U.S. and Caribbean as well as a massive earthquake in Mexico pushed Swiss Re to a nine-month loss. The Zurich-based reinsurer faces $3.6 billion in claims linked to the devastation.
Swiss Re swung to a net loss of $468 million for the first nine months, compared to a $3 billion profit last year, the reinsurer said on Thursday. The firm is digesting $3.6 billion in claims from clients following several major storms including hurricanes Irma, Harvey and Maria as well as a September earthquake in Mexico which killed more than 300 people.
Those natural catastrophes add to tropical cyclone Debbie in Australia and devastating floods in Peru, both earlier this year. Two weeks ago, Swiss Re estimated the damage from the most recent hurricanes at $3.6 billion.
Pricing To Perk Up?
Christan Mumenthaler, CEO of the reinsurer, called on the wider industry to rethink following the disasters: «In my view, many lines of business have been operating in an unsustainable environment. We expect pricing conditions to improve going forward – not only in reinsurance but also in commercial insurance.»
The burden from paying out the claims weighed on Swiss Re's combined ratio, a measure of how much of insurance premiums are being eaten up by damage claims. For the nine months, the ratio surged to 114.1 percent, from 93.8 percent. In its corporate business, the metric surged to 142.6 percent, from just under 100 percent year-ago.
Swiss Re's gross premiums actually beat analyst expectations, rising 5.1 percent to $26.7 billion. Shareholder's equity crumpled to $32.8 billion, from $37.4 billion year-ago.
