(Reuters) — Swiss Re on Tuesday forecast a third-quarter net loss of about $500 million after the reinsurer absorbed preliminary claims from Hurricane Ian of about $1.3 billion.
“Although the 2022 target of 10% Group ROE is unlikely to be achieved given the impact of natural disasters, the war in Ukraine and financial market volatility, the Group remains confident in the medium term and committed to its profitability targets for 2024,” the reinsurer said in a statement.
Ian, which made landfall in Florida last month, was one of the strongest hurricanes ever to make landfall in the United States, subjecting the region to extreme winds, storm surges and torrential rains.
Swiss Re estimated the preliminary total insured market loss from Hurricane Ian at $50-65 billion.
The company said its (life and health) L&H Re and Corporate Solutions businesses remained on track to achieve their 2022 targets, while (property and casualty) P&C Re was unlikely to meet its normalized combined ratio target of less than 94% in 2022, given an increase in small to medium claims.
“Swiss Re maintains its very strong capital position, with Group (Swiss Solvency Test) ratio of 274%, as of July 1, 2022. This enables Swiss Re to pursue profitable opportunities in a hardening reinsurance market, while remaining committed in its asset management priorities.”, it said ahead of quarterly results on 28 October.
Berenberg analyst Kathryn Fear lowered her estimate for 2022 net income to $947 million from $1.72 billion.
“This is primarily due to Hurricane Ian, which, according to our (loss) estimate of $1.1 billion, is effectively using up the group’s remaining natural disaster budget,” she wrote in a note, saying management had guided with half-year results that it had 1 .2 billion dollars in natural disaster budget for the second half of the year.