The world's second-largest reinsurer will swing to a first-half loss after padding its reserves to prepare for damage claims related to the coronavirus.
Swiss Re will swing to a first-half net loss of roughly $1.1 billion, from a $953 million year ago it said in a statement. The Zurich-based reinsurer said claims and reserves due to the coronavirus totaling $2.5 billion will weigh on its results in the first six months.
The pandemic is shaping up to be the insurance industry's biggest-ever loss event: Big events like Tokyo’s Olympics, where Swiss Re is exposed for $250 million, are also a major problem for reinsurers. In April, UBS boss Sergio Ermotti is poised to take over from long-standing chairman Walter Kielholz, who retires at 70.
Adequate Corona Cover
Separately, the Swiss reinsurer took in £1.2 billion ($1.5 billion) on the sale of its ReAssure unit to Phoenix, where it will also take a 13.3 percent stake and a board seat. It said its solvency ratio exceeded its 220 percent target after the ReAssure sale and pandemic losses.
Solvency is a regulatory measure of how much capital insurers hold to meet policy claims, even under unfavorable conditions. Finance chief John Dacey said Swiss Re expects the first-half claims and reserves will be adequate to cover most of its losses from the pandemic.
