Swiss Re beats forecasts with high earnings

Despite heavy and costly spring flooding in Germany and neighbouring countries, Swiss Re quadrupled its profits last quarter ed 37 via Flickr Creative Commons

Swiss Re, the world’s second biggest reinsurer, has beaten second-quarter earnings predictions with an unexpected net profit that was nine times greater than in the same period in 2012.

On Thursday, the company posted a second-quarter net profit of $786 million (CHF723 million) – compared with $83 million last year. Analysts polled by Reuters had given an average forecast of $659 million.

“This comes against the backdrop of high claims, especially those caused by the devastating floods in Europe and Canada,” the company’s Chief Executive Officer Michel Lies said in a statement.

Reinsurers help insurance company customers cover the costs of major damage claims like hurricanes and earthquakes in exchange for part of the premium.

Good policy renewals and higher premium volumes were the reasons

given for why the company had done so well.

“All business segments contributed positively to the robust results and profitable growth,” added the statement.

High profits amid cautious outlooks

Several other Swiss companies also reported good results on Thursday. The world’s largest staffing firm Adecco beat second-quarter profit expectations at €126 million (CHF155 million) – up 12 per cent on the same period last year. Food and drinks giant Nestlé posted first-half profits to CHF5.1 billion – up 3.7 per cent from that time in 2012.

However, the KOF Business Situation Indicator for the private sector economy, also published on Thursday, showed a slump in July following a rise the previous two months.

The business outlook survey found that although companies remained optimistic about the business trend in the coming six months, they were less confident than before.

All in all, the Swiss economy remains robust although it is not picking up speed. Companies are also planning to recruit less additional staff, according to KOF.