(Bloomberg) -- Swiss Re AG said it was raising reserves in its US Property & Casualty business by $2.4 billion in the third quarter, a move analysts said was positive despite a resulting downgrade to full-year profit expectations.
“We conducted a comprehensive review of our P&C reserves, considering the latest industry data and legal trends,” said Chief Executive Officer Andreas Berger. “We have addressed reserve developments in our entire US liability portfolio, including all prior underwriting years.”
Swiss Re said it now expects to report net income of $100 million for the third quarter, with the full year target now at “above $3 billion.” It had been targeting more than $3.6 billion for the full year.
Analysts including Kamran Hossain at JPMorgan said the step was positive as it should help to end questions on reserve adequacy and underlying profit was still strong.
“The introduction of a new CEO has led to decisive and accelerated action on reserves,” the analysts wrote in a note. “Despite a material charge, Swiss Re is still on track to hit earnings of more than $3bn for 2024.”
Swiss Re shares gained after the market open in Zurich on Thursday, and were up 7% as of 10:06 a.m. in Zurich.
The company is set to report its third quarter results on November 14.
--With assistance from Henry Ren.
(Updates with shares, analyst quote)
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