Financial Services

Swiss Re reports better-than-expected net income for 2017

Reinsurer rules out capital increase to make is easier for Japan’s SoftBank to buy stake

Swiss Re’s results were hit by a run of catastrophes during 2017, when total global insured losses from catastrophes were set to hit $136bn

Fri Feb 23 2018 - 16:41

Swiss Re reported better-than-expected 2017 net income on Friday despite huge claims during 2017, and ruled out a capital increase to make is easier for Japan’s SoftBank to buy a stake.

The world’s second biggest reinsurer said this month it was in talks about SoftBank taking a minority stake in a deal that could be worth $10 billion or more.

The Zurich-based company said on Friday there was no certainty any deal would be concluded, but it would not be issuing new shares to enable SoftBank to make an investment.

Swiss Re posted net profit of $331 million (€269m), down from $3.56 billion (€2.9bn) a year earlier but beating the average estimate of $119 million (€96.8m) in a Reuters poll.

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The results, buyback and rejection of a capital raising supported Swiss Re’s stock which gained 2.8 per cent in early trading, outpacing the Stoxx European sector index which was 0.3 per cent higher.

"We believe the update should be taken well, although the stock had already a strong run recently," said Baader Helvea analyst Daniel Bischof.

Insured losses

Swiss Re’s results were hit by a run of catastrophes during 2017, when total global insured losses from catastrophes were set to hit $136 billion (€111bn), the third highest on record for the sector. It estimated claims on Swiss Re from large natural catastrophes would be $4.7 billion in 2017.

As a result Swiss Re’s combined ratio for its main property and casualty business worsened to 111.5 per cent from 93.5 per cent a year earlier. The figure measures underwriting strength, with a figure above 100 meaning it paid out more to customers than it received in premiums. – Reuters

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