Swiss Re Maintains Target After Profit Beats Expectations — Update

By Adria Calatayud

Swiss Re reported a second-quarter net profit that beat analysts' expectations, thanks to higher earnings across all business units, and reiterated its guidance for the year.

The Zurich-based reinsurer said Thursday that it made a net profit of $996 million for the second quarter, ahead of analysts' expectations of $925 million, according to consensus estimates provided by the company. For the first half as a whole, net profit rose to $2.09 billion from $1.79 billion a year before.

Shares in European morning trade rose 3.5%, taking the stock's year-to-date gain to more than 21%.

Like its peers in the reinsurance industry, Swiss Re has benefited lately from a so-called hard market, in which premiums experience broad-based increases, as high interest rates helped reinsurers in pricing negotiations.

The Swiss Re Institue, the research arm of the group, last month forecast the hard market in nonlife insurance would continue over 2024 and 2025 due to inflation and rising claim costs pushing rates higher.

Swiss Re said its performance in the first half of the year benefited from disciplined underwriting, low natural-catastrophe claims and strong investment income.

The company's better-than-expected net profit came despite additions to loss reserves in the U.S. and a top-line performance that fell short of expectations.

The reinsurer generated first-half gross insurance revenue of $22.48 billion compared with $21.78 billion a year before. Insurance revenue growth was driven by rises in its life-and-health and corporate solutions segments that offset a small decline in the property-and-casualty segment.

However, analysts had forecast first-half insurance revenue at $23.16 billion, according to the company-provided consensus.

This was Swiss Re's first set of results since Andreas Berger took up the role of chief executive at the beginning of July.

Swiss Re doesn't seem to have changed direction with the new CEO in office, which highlights that delivering on the company's targets is likely his main priority, JPMorgan analysts wrote in a note to clients.

The company reaffirmed its net profit target for 2024 of more than $3.6 billion. Peers Munich Re and Hannover Re also confirmed their respective outlooks for the full year, which analysts saw as a reflection of their caution ahead of the peak of the Atlantic hurricane season.

Swiss Re said successful property-and-casualty contract renewals on July 1, which resulted in a 7% rise in volumes and a price increase of 8%, were consistent with its targets.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

August 22, 2024 05:07 ET (09:07 GMT)

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