Swiss Re declares $1.1bn first half loss on Covid-19 claims

Reinsurance giant has been hit with claims for payouts linked to cancelled events

Swiss Re has had to set aside $2.5bn for claims and reserves against expected claims related to Covid-19 for the first six months of 2020. Reuters

Swiss Re reported a net loss of about $1.1 billion (Dh4bn) in the first half, driven by claims related to the coronavirus pandemic.

Covid-related claims and reserves totalled $2.5bn in the first six months, the company said in a statement on Wednesday. That includes $476 million of losses booked in the first quarter, mostly from cancelled events.

Chief financial officer John Dacey said first-half claims and reserves – money set aside against potential future payouts – should cover the “majority” of the firm’s ultimate losses from the outbreak.

Lloyd’s of London has estimated that the insurance industry will suffer about $203bn in losses from the pandemic this year, with about $107bn coming from underwriting claims and the rest from insurers’ investment portfolios.

Another major reinsurer, Munich Re, reported Covid-related losses of about €700m (Dh3bn) in reinsurance in the second quarter, mostly from major events that were called off.

Swiss Re also announced the completion of the sale of its ReAssure Group subsidiary to Phoenix Group Holdings. The Swiss reinsurer received £1.2bn (Dh5.6bn) and a 13.3 per cent stake in Phoenix as part of the deal, according to the statement. The sale bolstered Swiss Re’s capital position, which “remains very strong” despite the impact of the pandemic, according to the statement.

“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,” Mr Dacey said.

Swiss Re will publish full first-half results on July 31.