Swiss Re plunges to loss on exceptional disaster claims
Zurich (AFP) May 5, 2011
Global reinsurance giant Swiss Re reported a first quarter loss on Thursday as its results were hit by exceptionally high claims for natural disaster damage including the giant earthquake and tsunami in Japan.
The world's biggest reinsurer posted a net loss of $665 million (euros, dollars) compared to a profit of $158 million a year earlier.
"In the first quarter of 2011, we experienced exceptionally high losses from natural catastrophes," chief executive Stefan Lippe said in a statement.
Swiss Re highlighted the events in Japan in March, floods in Australia and the earthquake in New Zealand.
Pre-tax losses due to natural disasters reached $2.3 billion during the first three months of the year, driving Swiss Re's property and casualty department to an operating loss of of $1.2 billion.
The overall net loss was nonetheless smaller than the average $1.0 billion forecast by analysts' polled by Swiss business news agency AWP.
Swiss Re said the disasters had tested the resilience of the insurance industry as a whole.
"The accumulation of natural catastrophe events is expected to turn 2011 into a year with one of the highest historical natural catastrophe claims burdens," the company said.
However, Lippe claimed the company had weathered the test well as its high capital base helped underwrite large and complex risks.
"We remain committed to our five-year targets and are confident that we can deliver," he added.
"The impact of natural catastrophe losses in the first quarter creates an additional challenge but it will also accelerate the market turn we had previously expected in 2012/2013," he added.
After years of price declines, parts of the insurance industry have been pushing for increases in premiums and underwriting capacity to reflect greater disaster risks as the market expands notably in emerging markets.
Apart from predicting the impact of the disasters in the Asia-Pacific region in recent weeks, the reinsurance giant has also reported that the global cost of natural and man-made catstrophes more than tripled in 2010 to $218 billion with the highest human toll for decades.
The risks and occurrence of diasters such as floods and storm damage from extreme weather events have grown with climate change, according to the company.
Swiss Re has also detected a growing losses from earthquakes due to the higher number of people living in urban areas as well as rising wealth and growth in seismically active areas.
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Germany's Allianz became on Wednesday the latest insurance giant to see its profits hit by claims related to a string of natural disasters, most notably Japan's monster earthquake and tsunami. Europe's biggest insurer said that first-quarter net profit slumped 44 percent to slightly more than 900 million euros ($1.3 billion) because of 750 million euros in expenses related to natural catastr ... read more
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