Swiss Re sees net income climb but drops buyback plans

Swiss Re sees net income climb but drops buyback plans | Insurance Business

Swiss Re sees net income climb but drops buyback plans

Swiss Re Group relied on the strong performance of its reinsurance business units to weather losses from natural and man-made catastrophes and achieve “profitable growth in a challenging market environment.” However, that wasn’t enough to stop the firm from shelving share buyback plans.

The reinsurance giant revealed a group net income of US$1.3 billion for the first nine months of 2019 – an increase of 23% from US$1.1 billion for the same period a year earlier. However, the Zurich-based company highlighted losses from Typhoon Faxai in Japan and Hurricane Dorian in the Atlantic alongside claims relating to the Ethiopian Airlines crash, the liquidation of Thomas Cook and the grounding of the Boeing 737 MAX as reasons why it has dropped a second tranche of share buybacks.

Looking at individual business units, P&C Re reported a 39% increase in net income to US$880 million, supported by profitable business growth and a strong investment performance. Net premiums earned also increased by 17% to US$14.2 billion, driven by large transactions and growth in the natural catastrophe business.

Growth in P&C Re was achieved despite the impact of US$1.7 billion in combined losses from natural catastrophes and man-made events – including US$460 million from Typhoon Faxai in Japan and US$300 million from Hurricane Dorian in the Atlantic.

Meanwhile, the group’s life & health businesses reported a stable net income of US$651 million for the first nine months of 2019, driven by active portfolio management actions and improved mortality developments in the Americas. However, corporate solutions took a hit with a net loss of US$441 million.

“The strength of our business with its global reach, diversification and very strong capitalisation enabled us to react fast and support our clients and their customers affected by the large natural catastrophes and man-made events in the first nine months,” said Christian Mumenthaler, chief executive officer of Swiss Re Group. 

“Our reinsurance business unit achieved profitable growth in a challenging market environment. The transformation of corporate solutions is underway, and we continue to benefit from robust gross cash generation in life capital. Our leading market position and positive rate dynamics year to date give us confidence for the upcoming renewal season.”

Moving forward, Mumenthaler said the group would “continue to focus on fostering partnerships to develop affordable, innovative, technology-based solutions that help close protection gaps, leverage our risk expertise and tap into new sources of growth.”