Swiss Re group CEO Christian Mumenthaler
By Ranamita Chakraborty
Even though Swiss Re reported a net loss of $1.1bn for the first half of 2020 after booking $2.5bn of coronavirus-related claims and reserves, its group CEO Christian Mumenthaler noted that the reinsurer expects the claims and reserves it booked in this period ultimately to cover the majority of its COVID-19 losses.
“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,” said Mumenthaler.
Excluding the impact of COVID-19 losses, Swiss Re’s net income amounted to $865m for the period –reflecting a strong underlying business performance across the group.
At the same time, the vast majority of the reinsurer’s COVID-19 losses represent incurred but not reported reserves.
“Although the COVID-19 crisis is still evolving, we took a prudent approach to build substantial reserves for the group’s exposures already in the first half of this year. This gives us more certainty in the outlook for the remainder of 2020 and beyond,” said Swiss Re group CFO John Dacey.
However, it should be considered that a range of factors relating to the pandemic may impact claims development in the coming quarters, either positively or negatively, relative to Swiss Re’s projections.
These factors include future infection and mortality rates; the duration and effects of mitigation measures, including on business activity; the timing of an effective vaccine and/or alternative treatment solutions; legislative or regulatory efforts and the outcome of court and arbitration cases on coverage issues; the impact of government stimulus packages; and the severity and duration of recessionary impacts.
Asia Insurance Review