Swiss Re AG (SREN.VX) on Thursday posted a sharp decline in third-quarter net profit compared to the same period last year, when the reinsurance giant significantly benefited from the sale of a U.S. business.
Zurich-based Swiss Re is in the midst of a streamlining push, which the firm has said it hopes to result in as much as $300 million in cash savings by 2015. The firm is also seeking to slash additional $4 billion in debt from its balance sheet in the next few years as it reconfigures its finances.
Swiss Re said its largest business of property and casualty reinsurance saw profit decline to $807 million in the quarter from slightly more than $1 billion in the same period last year. Premiums rose by nearly 20% to $4 billion, while the combined ratio was 80.9%, Swiss Re said.
A combined ratio is a measure of how much is paid out on claims and other costs per dollar earned, with a ratio of less than 100% meaning that an insurer is wringing profits from its underwriting business.
Swiss Re’s Admin Re business, which has been the subject of speculation about a possible sale, reported a decline in profit even while accounting for the windfall received in last year’s period from the sale of the U.S. side of the unit. Swiss Re said profit at Admin Re fell to $151 million from $823 million in the third quarter last year when the unit recorded a gain of $626 million from the sale of the U.S. Business.
Overall, Swiss Re said its net profit fell to $1.1 billion in the quarter from $2.2 billion in the same period last year.
Swiss Re’s life and health reinsurance lines posted a sharp drop in profit to $12 million from $187 million. The firm reiterated its commitment “to undertaking decisive action to strengthen the profitability of this core segment of Swiss Re’s business.”
Source: MarketWatch
