Pandemic takes its toll on insurance giants

Global insurance giants are reporting losses resulting from the novel coronavirus pandemic.

Swiss Re reported a net loss of US$1.1 billion for the first half of the year after booking claims and reserves related to COVID-19 of US$2.5 billion.

Excluding the impact of pandemic losses, net income amounted to US$865 million for the period, reflecting a strong underlying business performance across the group.

P&C Re achieved profitable premium growth and strong renewals in improving market conditions.

The Zurich-based insurance giant said it is maintaining its industry-leading capital position, with the Group Swiss Solvency Test ratio above the target level of 220 percent as of July 1.

“While the impact of the virus on our earnings is significant, it remains manageable as our operations continue uninterrupted, all our businesses are performing well and our capital position allows us to take advantage of attractive opportunities in an improving market.” said Swiss Re CEO Christian Mumenthaler.

American International Group said its general insurance business line recorded US$674 million of pre-tax losses for the quarter ended June 30, including US$458 million of estimated COVID-19 financial losses.

Its life and retirement segment reported an adjusted pre-tax income of US$881 million, a decrease of US$168 million compared with the previous year’s quarter driven by private equity losses, continued spread compression and elevated mortality related to the outbreak.

Brian Duperreault, AIG’s CEO, said while unprecedented and ongoing, COVID-19 remains an earnings, not a capital, event for the company.

To navigate the current complex environment, the insurer increased its financial flexibility, ending the second quarter with over US$10 billion in liquidity.