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COVID-19 pushes Swiss Re into first-half loss

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Swiss Re has reported a first-half net income loss of $US1.1 billion ($1.53 billion) after booking $US2.5 billion (3.49 billion) in claims and reserves related to the coronavirus pandemic.

If COVID-19 was excluded, the business made $US865 million ($1.2 billion) in net income compared with $US953 million ($1.3 billion) a year earlier.

Its property and casualty (P&C) arm is also in the red, posting a $US519 million ($724 million) net loss for the six months to June against a net income of $US771 million ($1.08 billion) a year earlier. The loss was due to COVID-19 claims and reserves.

Swiss Re says pandemic-related claims and reserves impacted the P&C business by $US1.5 billion ($2.09 billion). Most of the claims and reserves are for affirmative non-damage business interruption, cancelled or postponed events, casualty and credit & surety losses.

Excluding the pandemic, the P&C arm posted a decline in net income to $US646 million (901 million) from $US771 million due to elevated natural catastrophe losses in the first quarter.

“Based on current information and a prudent analysis of our businesses, and recognising the inherent uncertainty of the ongoing pandemic, we expect the claims and reserves we have booked in the first half of 2020 to cover the majority of our ultimate COVID-19 losses,” Group CEO Christian Mumenthaler said.

“While the impact on our earnings is significant, it remains manageable as our operations continue uninterrupted, all our businesses are performing well and our capital position allows us to take advantage of attractive opportunities in an improving market.”