Saturday, May 8, 2010

Swiss Re insurance profits dampened by disaster damage

Terra Daily via Agence France-Presse has an article about a former employer of mine: Swiss Re, one of the world's biggest reinsurers, on Thursday reported a surge in first quarter profit although its results were dampened by losses from Chile's earthquake and European storm Xynthia. Net profit rose by 21 percent to 158 million dollars (116 million euros) in the first three months of 2009 against 130 million dollars a year earlier, the company said in a statement.

"In the first quarter of 2010, we continued to deliver strong underlying performance, even though the result was impacted by high natural catastrophe losses, mainly from the earthquake in Chile and European winter storm Xynthia," said chief executive Stefan Lippe. "While natural catastrophes like these can contribute to earnings volatility, protecting our clients against such extreme events is the essence of our business model," he added.

The company's quarterly net profit had reached 403 million Swiss francs (362 million dollars, 281 million euros) in the final three months of 2009. The reinsurer provisionally estimated that it would have to foot about 200 million dollars of losses from the Deepwater Horizon oil rig blast in the Gulf of Mexico on April 20.

The total insurance industry payout could reach 1.5 billion to 3.5 billion dollars, it added in a provisional estimate of the cost of the disaster to the industry.

…Swiss Re's share of the insurance payout after storm Xynthia, which left 62 people dead when it struck the Atlantic and North Sea coasts of Europe in March, reached 100 million dollars. Those claims offset a strong revival from record losses in the financial crisis by depressing operating income in the company's property and casualty division, which dropped by 69 percent year-on-year to 259 million dollars in the first quarter….

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