Swiss Re posted a 5.3% drop in first-half net profit from a year earlier, dented by claims from natural catastrophes and cases related to the Ethiopian Airlines crash and Boeing 737 MAX fleet grounding.
The world’s second-largest reinsurance company also posted a loss in its commercial insurance arm, which is in the process of restructuring.
Net profit came in at $953 million, down from $1 billion a year earlier, but better than analysts’ expectations of $848 million, according to Reuters calculations and data from Refinitiv.
The Zurich-based company marked a net profit despite a low volume of claims for the broader industry from natural catastrophes during the first half of the year.
However, Swiss Re pointed to belated claims from last year’s typhoon Jebi in Asia, storm losses in Australia, and the claims from the Ethiopian Airlines crash and grounding of the Boeing 737 MAX fleet.
The combined ratio in its property and casualty division, a key measure of profitability, was 100.5% in the first half, worse than 92.9% from a year earlier. Readings below 100 indicate profitability, and the company said it expected the division’s ratio to be about 98% this year.
“We are confident that the measures we are taking in corporate solutions will return the business to underwriting profitability,” Swiss Re Chief Executive Christian Mumenthaler said.
The corporate insurance arm posted a net loss of $403 million, swinging from a profit of $58 million a year ago. Swiss Re said it was reducing risk at the unit and expected to be profitable in 2021.
