Swiss Re joins reinsurance profit bonanza
SWISS RE has become the third reinsurer this week to unveil expectation-busting profits, following yesterday’s announcement that net income rose 62 per cent in the third quarter.
European rivals Hannover Re and Munich Re have already raised their targets for 2012 following a year characterised by surging investment income and an absence of large payouts. Reinsurers provide additional cover for primary insurers and their profitability relies heavily on the absence of major catastrophes – such as last year’s Tsunami in Japan and New Zealand earthquake.
Swiss Re said profits were $2.2bn (£1.4bn) for the three months between July and September, smashing analysts’ forecasts of $1.4bn. As a result the company may choose to return some of the money to shareholders.
“If we are unable to find opportunities that meet our return expectations, we would look at further measures to return excess capital, such as a special dividend,” said George Quinn, Swiss Re CFO.
Third-quarter premiums rose 11 per cent year-on-year to $6.6bn and the firm said steeper demand following Hurricane Sandy could help push up premiums in the crucial January renewal period.