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Investing.com — Hurricane Ian’s toll on the world’s insurance industry came into focus on Tuesday as Swiss Re (SIX:SRENH) said it expects claims of over $1.3 billion to cover the devastation caused by the storm.
The world’s largest reinsurer said it expects to have posted a net loss of $500 million in the third quarter as a result and warned that it’s likely to miss its profit targets for the year.
“While the 2022 target of 10% Group [return on equity] is unlikely to be reached given the impact from natural catastrophes, the Ukraine war, and financial market volatility, the Group remains confident in the mid-term outlook and committed to its 2024 profitability goals,” Swiss Re said in a statement.
Hurricane Ian, which battered the coast of Florida and South Carolina at the end of September, caused overall insured losses of between $50 billion and $65 billion, according to the reinsurer, although it noted that its preliminary estimates are, as always, subject to some big possible revisions later.
The group said its life and health business and its corporate solutions business remain on track to meet their targets of $300 million in net profit this year and a combined ratio of less than 95%. (The combined ratio measures the underlying profitability of an insurer’s underwriting business, stripping out the influence of investment income.)
However, property and casualty suffered is likely to miss its 2022 target of 94%, due to what the group called “an increase in small- to mid-sized claims, partly driven by economic inflation” – a further sign that inflation has crept into corners of the economy far from its origins in the supply chain disruptions of the pandemic and the shock from global energy prices.
Swiss Re stock has fallen some 21% this year amid concern that the sharp rise in global interest will cause heavy mark-to-market losses on its vast bond portfolios.
