"Confluence of events" triggers net loss for Swiss Re

Swiss Re has reported a net loss of US$285 million (approx. CA$388.4 million) for the first nine months of 2022, compared to a net income of US$1.3 billion for the same period last year.

In its financial report, Swiss Re explained that the loss was driven by a US$442 million net loss in the third quarter (Q3), particularly the impact of Hurricane Ian on property and casualty reinsurance (P&C Re) and an increase in small- and mid-sized claims.

“The first nine months of this year were marked by a confluence of events affecting Swiss Re’s financial performance: from turbulence in the financial markets to an increase in natural catastrophe claims, surging inflation, and the war in Ukraine,” said Swiss Re group CEO Christian Mumenthaler.

The report also detailed a return on equity (ROE) of -2.1% for the first nine months of 2022, down from an ROE of 6.6% for the same period last year. The latest return on investment (ROI) was driven by negative market-to-market impacts on listed equity investments.

Among Swiss Re’s businesses, P&C Re took the hardest hit from this year’s challenges, with a net loss of US$283 million for the first nine months of 2022, compared with a net income of US$1.5 billion in the same period last year. On the bright side, the global reinsurer’s other businesses have performed well and have remained on track to meet their full-year targets.

“We have bolstered reserves by US$0.7 billion over the past 12 months to address the impact of economic inflation,” said Swiss Re group CFO John Dacey. “Rising interest rates are already helping to compensate for this impact, with the recurring contribution from our fixed-income portfolio rising by around US$100 million in the third quarter alone. Most importantly, despite the challenges this year, we have maintained our very strong capital position and remain committed to our capital management priorities.”