Hurricanes blow Swiss Re off profit target
Reinsurer Swiss Re said on Wednesday that claims for this year's extraordinary hurricane season would mean the concern would not meet its profit target.
The world's second-largest reinsurer said aggregate claims for hurricanes Rita and Wilma alone were expected to be $750 million (SFr964 million).
Swiss Re said its growth target for 2005 of ten per cent earnings per share would not now be met.
It said it would have to use "equalisation reserves to mitigate part of the claims" caused by this year's exceptional season for tropical storms.
"[It] reinforces the benefits of Swiss Re's highly diversified portfolio across lines of business and geographies," said company CEO, John Coomber, in a statement.
"Our financial strength remains very strong, enabling Swiss Re to take full benefit of the excellent pricing conditions in the current renewal season," he added.
Katrina, Rita and Wilma
Hurricane Rita made landfall in Texas in September, only a month after Katrina wreaked havoc in the southern United States.
Swiss Re estimates that Rita caused insurance claims of $10 billion – which came on top of the total insured losses for Katrina, believed to be around $40 billion ($1.2 billion for Swiss Re).
Wilma, which swept through the Atlantic and Gulf of Mexico in October, is expected to cost insurers up to $12 billion.
swissinfo with agencies
Key facts
Swiss Re estimates the total claims for the three hurricanes, Katrina, Rita and Wilma at around $2 billion.
The growth target for this year of 10% earnings per share will not be met.
Swiss Re has not changed its dividend for 2005, which should remain at SFr2.50 per share.
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