By Tom Sims
FRANKFURT (Reuters) -Reinsurance company Swiss Re said on Friday that it wouldn’t hit its full-year profit target in its life and health division after higher-than-expected claims.
The reinsurer, among the world’s largest, said that smaller health portfolios in Australia and elsewhere were underperforming its expectations.
Shares were down 4% in early trade after Swiss Re said the division “is not currently expected to meet its net income target” of around $1.6 billion for the full year.
In October, Swiss Re announced it was pausing new life and health business in Australia following a sharp rise in claims there after local insurers paid out more in mental health claims and younger people were put on permanent disability.
CFO Anders Malmstroem said on Friday that the pause was “to send a signal that insurance needs to be on a sustainable basis”.
Swiss Re made the warning as part of its nine-month earnings report, in which net profit rose a better-than-expected 85%, helped by low claims from natural disasters.
The net profit of $4.04 billion in the period compares with a profit of $2.18 billion a year earlier. Analysts had expected a profit of $3.93 billion, according to a consensus forecast.
“After significant large loss events in the first quarter, the second and third quarters benefited from low natural catastrophe losses – this provided a substantial tailwind,” said CEO Andreas Berger.
(Reporting by Tom Sims, Editing by Friederike Heine and Miranda Murray)
