Swiss Re 'Assessing' SoftBank Deal, 2017 Net Profit Hit by Natural Catastrophes -- Update

(Adds updates throughout.)

 
   By Pietro Lombardi 
 

Swiss Re AG (SREN.EB) is "carefully assessing" the implications of a deal with SoftBank Group Corp. (9984.TO), the reinsurance giant said on Friday, as it reported that net profit fell sharply to $331 million in 2017, hit by a number of natural catastrophes.

"Swiss Re's board of directors is carefully assessing the strategic and financial implications of such a partnership, having in mind the best interests of the company and its

shareholders," it said.

"Swiss Re's capital position remains very strong; the issuance of new capital is not under consideration," it said.

Earlier in February, The Wall Street Journal reported that SoftBank Group was in advanced talks to buy a stake of up to a third in the Swiss reinsurer.

The Zurich-based reinsurer's 2017 net profit of $331 million compares with a profit of $3.56 billion in 2016.

The results include a benefit of $93 million from U.S. tax reform.

Claims of about $4.7 billion stemming from natural disasters including hurricanes Harvey, Irma and Maria, as well as an earthquake in Mexico and wildfires in California, hurt the insurance company's full-year profit, it said.

"2017 was clearly a challenging year for the industry - and Swiss Re. However, we believe the outlook for our industry is now more positive than it has been during the last four years,"

Chief Executive Christian Mumenthaler said.

Gross premiums declined 2.4% to $34.78 billion.

Natural catastrophes weighed on the company's property and casualty business, as well as its corporate-solutions unit, both sliding to a loss in 2017.

Swiss Re's property and casualty business--its largest unit--posted a net loss of $413 million for the quarter compared with a net profit of $2.10 billion a year earlier. Gross premiums at the unit fell to $16.54 billion from $18.15 billion. Corporate solutions posted a loss of $741 million compared with a profit of $135 million a year earlier.

The board will propose to raise the dividend to 5 Swiss francs ($5.34) from the CHF4.85 it paid the previous year and to launch a new buyback program of up to CHF1 billion.

The company said its January 2018 renewals premium volume increased 8%, while prices were up 2%.

Write to Pietro Lombardi at [e-mail]

(END) Dow Jones Newswires

February 23, 2018 02:51 ET (07:51 GMT)

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