Swiss Re smashes profit forecasts
Swiss Re the world’s second-biggest reinsurer, smashed expectations with a $812m (£511m) net profit in the second quarter as recovering financial markets boosted asset values and investment returns.
Operating income of $1.2bn at the Zurich-based reinsurer’s asset management unit more than offset a further $130m hit from the Chile earthquake and a $200m hit from the Deepwater Horizon oil rig explosion, the group said.
The company’s property and casualty reinsurance combined ratio – a measure of underwriting profitability – improved to 102 per cent from 109.4 per cent in the previous quarter, but missed forecast. A number below 100 percent indicates operating profitability.
Swiss Re said it was sticking to its target of 12 percent return on equity over the reinsurance cycle.
Swiss Re’s net profit of $812m for the quarter came well ahead of the $359m analysts’ forecast in a Reuters poll.
Excess capital was $10bn at the end of June, down from $12bn at the end of the first quarter, but still giving Swiss Re breathing space as it tries to regain the coveted ‘AA’ credit rating lost in the crisis. Standard & Poor’s currently rates the company’s financial strength ‘A+’.