Swiss Re quarterly profit rises, misses expectations

Reuters with CNBC.com
Q2 was a 'modest miss': Swiss Re CFO

Swiss Re, the world's second-largest reinsurer, said on Thursday that second-quarter net profit rose 2 percent on fewer natural disasters in the period and a healthy return on its investment portfolio, but missed analyst expectations.

The Zurich-based firm said it is on track to meet its targets, which include hiking earnings per share by 10 percent annually, after paying special dividends.

Net profit for the three months rose to $820 million, from $802 million. This missed analysts' estimates, which averaged $835 million in a Reuters poll. Shares of the firm closed 1.4 percent lower on Thursday.

Chief Financial Officer David Cole told CNBC on Thursday that the company's latest earnings were not disappointing, despite missing analyst expectations.

"I would say it was a very modest miss and wouldn't want to focus on that too much...From our point of view, we continue to be well on track with our financial targets."

Philipp Schmidli | Bloomberg | Getty Images

Swiss Re and other reinsurers help insurance companies cover the cost of major damage claims, such as for hurricanes and earthquakes, in exchange for part of the premiums their insurance company clients pay.

Cole said that Swiss Re had a "very strong position" in life and health reinsurance, with net income in that unit rising to $218 million from $48 million in the same quarter last year.

"Overall, we see that we have a very strong market position on the life and health side, we have a good quality portfolio and I think most importantly, good relationships with our clients."

Swiss Re also said it posted a 31 percent rise in its July renewals season, which focuses on the Americas, Australia and New Zealand.

Despite Cole's optimism, he admitted there was "softening" in the property and casualty side of the business.

Pension funds and other specialized investors have been pouring money into the reinsurance business, competing with traditional reinsurers such as world No.1 Munich Re and Swiss Re, and putting pressure on prices. The German reinsurer reports the quarter on Aug. 6.

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