Insurance giant Swiss Re posts 580% jump in full-year profit, warns consumers about climate costs
Swiss Re CEO Christian Mumenthaler gestures during a session of the World Economic Forum (WEF) annual meeting in Davos on January 18, 2024.
Fabrice Coffrini | Afp | Getty Images
Insurance giant Swiss Re on Friday reported a sharp upswing in full-year profit, benefitting from what it described as an attractive market environment after a “batch of bad years.”
The Zurich-headquartered company posted full-year net profit of $3.2 billion, in line with expectations according to an LSEG-compiled consensus. It marked a nearly 580% increase when compared to the previous year’s $472 million profit.
Swiss Re proposed a 6% increase in its dividend to $6.80 per share for 2023.
The firm’s results reflect a dramatic recovery from 2022 when the company faced high inflation, claims from Hurricane Ian in Florida, and losses from the coronavirus pandemic.
Swiss Re CEO Christian Mumenthaler told CNBC’s “Squawk Box Europe” on Friday he was “very happy” with the firm’s 2023 results and said the company had a “very positive” outlook.
Asked whether the insurance and reinsurance industry had been putting up prices too much and thus creating an inflationary problem, Swiss Re’s Mumenthaler replied: “In the end, the role of insurance and reinsurance in particular is to put a fair price to risk and I think we have actually been lagging a little bit in the last few years.” Reinsurance refers to insurance for insurance companies.
Looking ahead, Mumenthaler warned that the price of the climate crisis would soon be at the door of consumers for the first time.
“With climate change, risks have increased a lot and you could see it in our profits, which were not adequate over the last few years. And so this is a reaction, a reassessment of the risk,” he added.
Firefighters work on the zone of a forest fire in the hills in Quilpue comune, Valparaiso region, Chile on February 3, 2024.
Javier Torres | Afp | Getty Images
“To a certain extent, what we see here … is the price for climate change for the first time coming at the door of regular consumers. So far, this was a very abstract problem but here you can see the practical implications, so I don’t think we are above anything we need for shareholders to get their adequate returns,” he said.
Shares of Swiss Re were 2.1% lower at 10:30 a.m. London time.
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