(AFP / SEBASTIEN BOZON)
The Swiss reinsurance giant Swiss Re reported a net profit of $2.2 billion on Thursday, marking as expected a clear slowdown compared to the first half given the sharp increase in its reserves in the United States.
The group, whose results are not comparable to those of the previous year due to a change in accounting standards, announced last week that it had planned to increase its reserves in property insurance in the United States. United of 2.4 billion dollars.
For the third quarter alone, its net income was $102 million.
Expenses for large natural catastrophes amounted to $813 million over nine months in its property reinsurance business, including $743 million in the third quarter alone, under the weight of compensation for the hailstorm that swept through Calgary in Canada, Storm Boris in Europe and Hurricanes Debby and Hélène. Added to this was $294 million in its business solutions division.
The group, which acts as an insurer for insurers, also expects costs below $300 million for Hurricane Milton in early October which will affect its results in the fourth quarter, it warns.
As indicated last week when announcing the increase in its reserves, the reinsurer has moderated its ambitions for 2024. It is now targeting a net profit above 3 billion dollars, compared to 3.6 billion previously.
– “Messy” but “excellent” results –
The group warned last week that it would not achieve the objective it had set for its combined ratio in property and casualty insurance, a key indicator for assessing the profitability of insurers. He had initially set the bar at around 87%. But it deteriorated over nine months, climbing to 92.8%, quantifies the group in the press release.
This ratio compares management fees and claims costs to the amounts of premiums collected. The lower it is, the more profitable insurers are.
These results are “a bit confusing”, but excluding decisions on reserves, appear “excellent”, reacted Simon Foessmeier, analyst at Vontobel, in a stock market commentary.
“The management team is paving the way for very good years in the future,” he believes.
By increasing reserves, the new boss, Andreas Berger, who took over management in July, responded to a long-standing criticism from investors who considered his level of reserves insufficient.
On Monday, its German competitor Hannover Re raised its net profit target by nearly 200 million euros to bring it to around 2.3 billion euros despite the floods in Central and Eastern Europe and Hurricane Helene. Because although significant, the compensation amounts for the most expensive major events remained within the planned budget, the German group clarified.
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