After Swiss Re reported a nine-month net loss close to half a billion dollars from recent catastrophes, Chief Financial Officer (CFO), David Cole, warned that climate change had altered the risk landscape.
The reinsurer expects natural catastrophe claims from events such as hurricanes Harvey, Irma and Maria, and Australia’s Cyclone Debbie to reach $4 billion.
“The world needs to understand that climate change is a fact,” Cole told CNBC.
“I think society really needs to wake up and realize that things are changing and if you continue to build in areas that are subject to flood, you need to be prepared to actually deal with the aftermath of flood,” he added.
The Swiss reinsurance giant reported its nine-month property and casualty combined ratio has risen to 114.1% after being hit with heavy claims losses following recent catastrophe events.
Cole told CNBC everyone needs “to realize climate change is a fact and we need to prepare for that.
“Our role is to make people aware, to help people understand the risk they face and also to put a price on that risk. If these prices are unsustainable we need to signal that to the market.”
Swiss Re said it would go ahead with its proposed share buyback of up to $1 billion, due to start on Friday, stating previous low loss years and strong capitalization meant it was able to absorb the losses.
“We expect pricing conditions to improve going forward — not only in reinsurance but also in commercial insurance,” Chief Executive Officer (CEO), Christian Mumenthaler, commented in a statement. While recent losses have put pressure on earnings, they are expected to ease pricing pressure across many lines of business in the re/insurance industry at upcoming renewals.