Reinsurance company Swiss Re said on Wednesday that claims and reserves of $2.5 billion related to COVID-19 will lead to a net first half loss of about $1.1 billion.
The company, which reported the loss ahead of its regularly planned July 31 results release, added that it expects claims and reserves booked in the first six months of 2020 should cover most pandemic-related losses, though much uncertainty remains.
Swiss Re had already booked $476 million of COVID-19 losses, mainly for event cancellations, in the first quarter. About $1.5 billion of the first-half losses impact Property & Casualty Reinsurance, while $500 million affect Corporate Solutions, it said.
Swiss Re added its Swiss Solvency Test (SST) ratio, a measure of its financial strength, was above the target level of 220% as of July 1, including the impact from the sale of ReAssure and COVID-19 losses.
“Our teams have conducted a thorough and prudent analysis of all potential exposures related to COVID-19,” Chief Financial Officer John Dacey said in a statement.
“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.”
Zurich-based Swiss Re also said it completed its ReAssure unit sale, reaping 1.2 billion pounds ($1.53 billion) and giving it a 13.3% stake in Phoenix Group Holding