Global reinsurance giant Swiss Re has confirmed that its authorised new public share buyback programme of up to CHF 1 million (USD 1.03mn) will not be launched due to current financial market volatility being driven by the COVID-19 coronavirus pandemic.
Following commentary from analysts that the Switzerland-based reinsurer’s share buyback programme would likely be in doubt this year, Swiss Re advised that there was potential for the programme to be delayed owing to the impacts of the pandemic.
At Swiss Re’s annual general meeting (AGM), which took place without shareholder presence, all proposals put forward by the Board of Directors were approved. This includes a 5% increase in the regular dividend to CHF 5.90 per share and the authorisation of a new public share buyback programme.
However, at its post-AGM meeting, the Board of Directors of Swiss Re decided that as a result of the significant levels of financial market volatility and the uncertain economic landscape owing to the COVID-19 outbreak, the up to CHF 1 million programme will not be launched.
Despite social distancing measures, Swiss Re notes that shareholders were able to exercise voting rights in writing or electronically, with votes cast by shareholders representing more than 63% of the shares entitled to vote.
Walter Kielholz, Swiss Re’s Chairman, commented: “I would like to thank the shareholders for voting via the independent proxy at this year’s AGM. This was a very unusual meeting, and we hope to return to our normal AGM format next year. Despite the current circumstances, business is running without interruptions at Swiss Re as we continue to handle claims, renew contracts, share our knowledge and innovate.
“While at this point we assess the financial impact of the current crisis on Swiss Re as absolutely manageable, we run our business and allocate capital with the prudence that current volatility calls for.”
While the impact of the current crisis on both the underwriting and investment operations of global insurers and reinsurers remains uncertain and will only become clearer in time, Swiss Re executives have said previously that the firm sees its exposure as “absolutely manageable”.
The AGM also saw the approval of the company’s annual and consolidated financial statements for 2019 and shareholders discharged all members of the Board for the last financial year.
The increased regular dividend of CHF 5.90 per share is set to be distributed beginning April 23rd, 2020 and from April 21st, 2020, Swiss Re shares will be traded ex-dividend.
The reduction in share capital by CHF 990,739.80 as a result of cancelling the repurchase of 9,907,398 shares was also approved by the Board at the AGM.
Towards the end of March, Swiss Re announced that Sergio P. Ermotti, Joachim Oechslin and Deanna Ong had been nominated for election as new members of the Board. At the AGM, all three were elected as new members for a one-year period, while all proposed for re-election were also approved, including the re-election of Walter Kielholz as Chairman of the Board.
To help tackle to global coronavirus pandemic, Swiss Re announced recently a donation of CHF 5 million (USD 5.2 million) to support global COVID-19 relief efforts, made through the Swiss Re Foundation.
