Swiss Re pegs $2.5bn COVID-19 hit and $1.1bn loss in H1 2020
Global reinsurer Swiss Re has reported significant claims and reserves related to the COVID-19 crisis, totalling $2.5 billion before tax in the first half of 2020, impacting both property & casualty (P&C) and corporate solutions business.
As a result, the group expects to report a net loss of approximately $1.1 billion in H1 2020.
Swiss Re said nearly $1.5 billion of its H1 losses impact property & casualty reinsurance and approximately $0.5 billion impact corporate solutions.
The vast majority of these losses are classified as incurred but not reported (IBNR) reserves and are driven by estimates for affirmative property non-damage business interruption and event cancellation losses, according to the reinsurer.
Life & health reinsurance is impacted by approximately $0.5 billion, mainly as a result of higher mortality claims in the US and the UK versus expected levels.
Excluding the impact of COVID-19 losses, Swiss Re expects the group net income to be approximately $0.9 billion, reflecting a strong underlying performance across all businesses.
In the first quarter of 2020, Swiss Re incurred $476 million of losses related to COVID-19, mainly for event cancellations.
John Dacey, Swiss Re’s group chief financial officer, said: “Our capital position remains industry-leading. The underlying performance of all our businesses is strong, and they continue to deliver on their strategic objectives, such as the completion of the ReAssure sale. Our teams have conducted a thorough and prudent analysis of all potential exposures related to COVID-19. Based on our current information and related assessments, and noting the unusually high level of uncertainty related to these insured losses, we expect the claims and reserves we have booked the first half of 2020 to cover the majority of our ultimate COVID-19 losses."
