Swiss Re Quarterly Net Rises 14% After Lower Catastrophe Losses
Nov. 7 (Bloomberg) — Swiss Re AG, the world’s second- biggest reinsurer, said third-quarter profit rose 14 percent after lower-than-expected losses from natural catastrophes .
Net income rose to $1.23 billion from $1.07 billion in the year-earlier period, the Zurich-based reinsurer said in a statement today. That beat the $928.6 million average estimate of 13 analysts surveyed by Bloomberg.
Swiss Re is cutting back on catastrophe coverage and moving into new lines of business to bolster earnings growth as low interest rates and fewer natural disasters undercut prices. Munich Re, the world’s largest reinsurer, said yesterday that third-quarter profit rose 16 percent, while German rival Hannover Re reported a 21 percent increase for the period.
“I’m pleased to report that all business units have again delivered a solid performance during the third quarter, contributing to an overall strong group result,” Chief Financial Officer David Cole said in the statement. “This performance was supported by a lower-than-expected loss burden from natural catastrophes as well as a continued improvement in the life and health operating margin.”
Swiss Re has fallen about 5 percent this year, valuing the company at 29 billion Swiss francs ($29.8 billion). That compares with a 4.3 percent increase in the 32-company Bloomberg Europe 500 Insurance Index.
Swiss Re wants to invest $3 billion of its excess capital at an 11 percent return on equity by 2015. It does not disclose how much of the capital it holds.
Reinsurers such as Swiss Re who help primary insurers cover the costs of damage claims from disasters like floods and hurricanes , are under pressure from declining prices for their coverage and a years-long slump in borrowing costs across developed countries.
To contact the reporter on this story: Carolyn Bandel in Zurich at cbandel@bloomberg.net To contact the editors responsible for this story: Mark Bentley at mbentley3@bloomberg.net Cindy Roberts, Simone Meier