Swiss Re Net Income Beats Estimates on Lower Catastrophe Claims

(Bloomberg) — Swiss Re AG posted declining revenue and new business volumes on Thursday, adding to signs of a cyclical downturn in the insurance industry.

Swiss Re’s overall revenue fell 4% to $10 billion, largely due to lower revenues in its property & casualty reinsurance unit. The Zurich-based firm still posted better than expected profit for the first quarter at $1.5 billion, and higher investment income.

Insurers are currently facing declining pricing power with premium growth expected to slow into next year, according to Bloomberg Intelligence. The economic backdrop is also presenting challenges, with higher inflation and macroeconomic uncertainty affecting sentiment.

Swiss Re’s net income result was driven by lower natural catastrophe claims, while the investment return gain boosted by the sale of some real estate assets in Switzerland.

“Despite the headline beat, quality is questionable and cycle effects are becoming evident also with inflationary pressures,” said James Shuck, an analyst at Citigroup.

Shares were down 3.5% in Zurich at 12:31 p.m., and are down almost 7% this year.

The ongoing uncertainty around the Middle East conflict has prompted the reinsurer to take “a prudent approach,” Chief Financial Officer Anders Malmström said. He added that Swiss Re was setting aside $400 million additional reserves for potential inflationary impacts.

Swiss Re’s key property and casualty business reported $754 million in the quarter, while the Life & Health unit reported net income of $491 million, both above estimates.

In February Swiss Re surprised the market by announcing it would repurchase up to $1.5 billion of its own shares in 2026, including $500 million as part of its sustainable annual buyback program.

–With assistance from Macarena Muñoz.

(Adds shares and analysts in paragraph 5)

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