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The disasters are lowering the net income of Swiss Re in the first quarter

by

Frédérique De Simone

14 May 2019 09:30

Photo : Freepik

The reinsurer Swiss Re has seen a decline in its net profit in the first quarter of 2019. It is increased from 457 million u.s. dollars (US$ M) in 2018 to 429 MILLION US$ in 2019. These results are a reflection of good performance in life and health reinsurance, but also major losses in reinsurance of damages, in writing to the reinsurer.

“Our business property and CASUALTY have been affected by significant losses, but the life reinsurance continued its momentum is positive and regular, a sign of the strength of our diversified business model. This positive momentum gives us confidence in our outlook, ” said Christian Mumenthaler, chief executive officer, Swiss Re.

The net earned premiums group Swiss Re amounted to $ 8,78 billion u.s. dollars (US$ b) quarter ended march 31, 2019.

Disasters cripple the net income for property & CASUALTY

The first quarter of the year 2019 has been loaded in catastrophic events, affecting happily the damage insurance. Large and rare floods have transformed the streets of the north-east of Australia in torrents. These floods have caused losses of 210 MILLION US$.

The crash of the Boeing 737 max of theEthiopian Airlines, as well as all the trials and tribulations of this fleet of aircraft has, for its part, led to claims of$ 90 MILLION US in a single quarter.

The cyclone Idai in Mozambique as well as the large number of late complaints of past events, like the typhoon Jebi in Japan and other losses caused by man have also had a negative impact on the results of the first quarter of the year 2019.

Thus, the net benefit to the activities of reinsurance has dropped in the first quarter, from US$ 345 MILLION in 2018 to$ 13 MILLION US. Same goes for the combined ratio, which currently shows 110,3 %, whereas it was 92 % last year, on the same date.

The net earned premiums have increased compared to the first quarter of 2018. They had 3,82 billions of US$ in 2018 as they are now to 4.24 billion US dollars in 2019, thanks to large transactions, said Swiss Re.

Record net income for the life reinsurance

The life reinsurance has proven to be very different than the reinsurance of damages. During the first quarter, the industry recorded a net income record of$ 328 MILLION US, compared to$ 201 MILLION US last year. These results are due to an improvement of the evolution of mortality in America and a good return on investment, ” says Swiss Re.

The net premiums earned have decreased by$ 3.3 billion in 2018 to US $ 3.1 billion in 2019, under the effect of the adverse movement of the exchange rate and the termination of a contract of retrocession group with Life Capital.

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