Swiss Re 'Assessing' SoftBank Deal, 2017 Net Profit Hit by Natural Catastrophes -- Update
February 23 2018 - 3:06AM
Dow Jones News
(Adds updates throughout.)
By Pietro Lombardi
Swiss Re AG (SREN.EB) is "carefully assessing" the implications
of a deal with SoftBank Group Corp. (9984.TO), the reinsurance
giant said on Friday, as it reported that net profit fell sharply
to $331 million in 2017, hit by a number of natural
catastrophes.
"Swiss Re's board of directors is carefully assessing the
strategic and financial implications of such a partnership, having
in mind the best interests of the company and its
shareholders," it said.
"Swiss Re's capital position remains very strong; the issuance
of new capital is not under consideration," it said.
Earlier in February, The Wall Street Journal reported that
SoftBank Group was in advanced talks to buy a stake of up to a
third in the Swiss reinsurer.
The Zurich-based reinsurer's 2017 net profit of $331 million
compares with a profit of $3.56 billion in 2016.
The results include a benefit of $93 million from U.S. tax
reform.
Claims of about $4.7 billion stemming from natural disasters
including hurricanes Harvey, Irma and Maria, as well as an
earthquake in Mexico and wildfires in California, hurt the
insurance company's full-year profit, it said.
"2017 was clearly a challenging year for the industry - and
Swiss Re. However, we believe the outlook for our industry is now
more positive than it has been during the last four years,"
Chief Executive Christian Mumenthaler said.
Gross premiums declined 2.4% to $34.78 billion.
Natural catastrophes weighed on the company's property and
casualty business, as well as its corporate-solutions unit, both
sliding to a loss in 2017.
Swiss Re's property and casualty business--its largest
unit--posted a net loss of $413 million for the quarter compared
with a net profit of $2.10 billion a year earlier. Gross premiums
at the unit fell to $16.54 billion from $18.15 billion. Corporate
solutions posted a loss of $741 million compared with a profit of
$135 million a year earlier.
The board will propose to raise the dividend to 5 Swiss francs
($5.34) from the CHF4.85 it paid the previous year and to launch a
new buyback program of up to CHF1 billion.
The company said its January 2018 renewals premium volume
increased 8%, while prices were up 2%.
Write to Pietro Lombardi at pietro.lombardi@dowjones.com
(END) Dow Jones Newswires
February 23, 2018 02:51 ET (07:51 GMT)
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