Global reinsurance giant Swiss Re has announced significant claims and reserves related to the COVID-19 pandemic of $2.5 billion (pre-tax) in the first half of 2020.
As a result of the high level of losses from the pandemic, Swiss Re expects to report a net loss of approximately $1.1 billion in the first-half of 2020.
Excluding COVID-19 claims and reserves, the reinsurer says that group net income would have totalled approximately $0.9 billion.
In Q1 2020, Swiss Re announced COVID-19 losses of $476 million, mostly from event cancellation. According to the firm, roughly $1.5 billion of its H1 2020 losses impact Property & Casualty Reinsurance and roughly $0.5 billion impact Corporate Solutions.
Swiss Re adds that most of these losses are classified as incurred but not reported (IBNR) reserves and are driven by estimates for affirmative property non-damage business interruption and event cancellation losses.
The reinsurer’s Life and Health Reinsurance is impacted by roughly $0.5 billion, mainly driven by higher mortality claims in the US and the UK versus expected levels.
“Our capital position remains industry-leading. The underlying performance of all our businesses is strong, and they continue to deliver on their strategic objectives, such as the completion of the ReAssure sale. Our teams have conducted a thorough and prudent analysis of all potential exposures related to COVID-19.
“Based on our current information and related assessments, and noting the unusually high level of uncertainty related to these insured losses, we expect the claims and reserves we have booked the first half of 2020 to cover the majority of our ultimate COVID-19 losses,” said John Dacey, Swiss Re’s Group Chief Financial Officer (CFO).