Global reinsurance giant Swiss Re expects to report a net loss of $500 million for the third quarter of 2022 on the back of hurricane Ian related claims of a huge $1.3 billion, net of reinsurance and before tax.
Swiss Re is the first large, global reinsurer to announce its preliminary claims from hurricane Ian, which struck western Florida as a Category 4 storm on September 28th.
Overall, Swiss Re estimates the preliminary total insurance and reinsurance industry loss from Ian to be between $50 billion and $65 billion, including losses to the National Flood Insurance Program (NFIP).
The reinsurer notes that its property and casualty (P&C) reinsurance division’s reported and normalised combined ratios were affected in Q3 2022 by a rise in small-to mid-sized claims, partly driven by economic inflation. In light of this, Swiss Re feels that its P&C Re unit is unlikely to reach its normalised combined ratio target of less than 94% in 2022.
In contrast, both life and health reinsurance (L&H) and Corporate Solutions remain on track to achieve their respective targets for 2022 of roughly $300 million net income and a reported combined ratio of under 95%.
However, the impacts of natural catastrophes in the period, alongside the ongoing war in Ukraine and continued financial market volatility, means that the 2022 target of a 10% Group return on equity (ROE) “is unlikely to be reached”.
Although, Swiss Re says that it remains confident in the mid-term outlook and is committed to its 2024 profitability goals.
The reinsurer adds that it maintains a very strong capital position, with Group SST ratio of 274% as of July 1st, 2022.
“This allows Swiss Re to pursue profitable opportunities in a hardening reinsurance market, while remaining committed to its capital management priorities,” says the firm.
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