Insurance company Swiss Re reports a first quarter net profit of $158 million

Swiss Re reports $158 million Q1 profit

ZURICH — Swiss Re Insurance Co. on Thursday posted a first-quarter net profit of $158 million as strong underlying revenues helped offset the impact of two major natural disasters on its property and casualty business.

The net profit is a 22 percent increase compared with the same period last year when Swiss Re posted a $130 million net profit.

Earnings per share were 0.49 Swiss francs ($0.44), up 9 percent from 0.45 francs in the year-earlier period, the company said.

Swiss Re said the result was affected by estimated claims of $500 million from Chile’s huge earthquake on Feb. 27 triggering a tsunami and killing 486 people, and $100 million from winter storm Xynthia that swept across Western Europe on Feb. 26-28, causing severe damage in Spain and France.

Operating income in Swiss Re’s property and casualty business was down 69 percent at $259 million in the quarter.

The company’s combined ratio deteriorated to 109.4 percent from 90.2 percent. A combined ratio below 100 percent indicates profitability in the insurance industry.

Life and health insurance brought $345 million.

Helvea analyst Tim Dawson said the profit was slightly higher than he had expected, noting that Swiss Re’s balance sheet is extremely strong.

Shares in Swiss Re closed up 0.34 percent to 44.76 francs ($40.30) on the Zurich exchange.

The April 20 explosion of the Deepwater Horizon oil rig in the Gulf of Mexico, which has caused a major oil spill, will lead to an estimated market loss of between $1.5 billion and $3.5 billion, Swiss Re said.

It estimated its own loss from the disaster will be around $200 million before tax.

Reinsurance companies sell backup coverage to other insurers, spreading risk in the event of huge losses.

Swiss Re said it has strengthened its capital position and estimates that the excess capital at the AA level increased to over $12 billion.