Swiss Re's profits dropped on the year. Besides high damage claims, the reinsurer was also forced to prop up a loss-making unit.
The Zurich-based reinsurer's net profit dropped more than 5 percent to $953 million, it said in a statement on Wednesday. Swiss Re was hit by a series of damage claims in the six months, including natural disasters in Japan and Australia as well as airlines pulling a Boeing jet from their fleet amid concerns over safety.
The reinsurer, the second-largest in the world after Munich Re, was also hobbled by an unprofitable corporate solutions unit, or business directly with the end client. The business swung to a $403 million loss from a $53 million profit year-ago.
Commited to Stay
Swiss Re propped up reserves at the unit, where it has been pruning its underwriting portfolio, by $328 million. It also spent $100 million on reinsurance for its property and casualty unit in what Swiss Re termed an «adverse development cover».
«The business unit is also actively reducing risk exposures in specific lines to ensure a more focused and profitable portfolio going forward,» Swiss Re said. It said it aims to return to profitability, targeting a combined ratio of 98 percent in 2021.
Swiss Re also underpinned the unit's capital by $600 million in the period, to emphasize that it intends to stay in the direct commercial insurance market. The drop in Swiss Re's overall profit was softer than expected: analysts had forecast $848 million, according to «Reuter».
