Swiss Re sees earnings boost from falling Covid-19 claims, targets bigger presence in Greater Bay Area to tap strong demand
- Falling claims from Covid-19 cases will boost earnings, return on equity for world’s second-largest reinsurer, CEO of life and health division says
- Despite setbacks in the past three years, ‘more people are aware of the importance of buying insurance protection in a post-Covid era’
The Zurich-based group said lower pandemic-related claims helped restore its profitability in the first half of this year following global vaccination efforts to fight the virus, according to Paul Murray, CEO of Swiss Re’s life and health business. As a result, the mortality rate is expected to return to pre-pandemic levels, he added.
“Over the course of the three-year-long pandemic, we paid more than US$3.5 billion in claims in excess of what we normally paid,” he said in an interview in Hong Kong. The upside is that “more people are aware of the importance of buying insurance protection in a post-Covid era”, he added.
Swiss Re operates 80 offices globally with 14,400 employees. It wrote US$47.9 billion in gross premiums in 2022, trailing Munich Re’s US$70.8 billion. A reinsurer provides insurance to insurance companies, sharing the risk and claims while allowing insurers to take on more business than their capital base would allow.
There were 6.96 million deaths worldwide linked to Covid-19 and 771.2 million confirmed cases as of October 4, according to the World Health Organization. Reported deaths fell 80 per cent to 241,634 in the first nine months this year. There were 1.25 million deaths in 2022, 3.54 million in 2021 and 1.94 million in 2020.
Murray expects Swiss Re’s life and health business to meet its target net profit of about US$900 million in 2023, or about 30 per cent of the group earnings. Murray’s unit achieved US$393 million in the first half, compared with US$2 million in the same period a year earlier.