Swiss Re says it weathers oil spill costs with big profit
Swiss Re, one of the world's biggest reinsurers, reported on Thursday an 812-million-dollar second-quarter net profit despite the cost of disaster damage from the Gulf of Mexico oil spill.
The result marked a shift out of a 342-million-dollar (259-million-euro) net loss during the same period last year and exceeded analysts' expectations.
"Swiss Re's business performed well in the second quarter of 2010," said chief executive Stefan Lippe in a statement.
"Our underlying earnings power continues to be strong and we benefited this quarter from an excellent result in Asset Management," he added.
The reinsurer estimated that it would foot property damage claims of about 200 million dollars before tax after the giant oil spill from BP's Deepwater Horizon oil rig off the US coast.
In addition, a 130-million-dollar increase in estimated claims from Chile's earthquake was added during the second quarter, bringing the total to about 630 million dollars before tax.
Swiss Re cautioned that the reinsurance industry would face pressure from regulatory change, low investment returns and weaker profitability, generating "moderate but stable growth" for the company.
"We anticipate that the property and casualty market will grow on average by 6.5 percent and the life and health market by 3.7 percent annually during the decade ahead," said Lippe.
Swiss Re said it expected to have shed its major legacy investments, which had generated massive losses in the financial crisis, by the end of the this year.
© 2010 AFP