CEO Affirms That Swiss Re Is Open To Anchor Shareholder After A Softbank Investigation
The president of Swiss Re AG said the reinsurer would welcome an anchor investor after multi-billionaire Masayoshi Son had contacted him with SoftBank Group Corp.
In a business where results can radically change from year to year, “it’s not bad to have an anchor shareholder,” Christian Mumenthaler said at a conference in Zurich. he said. “If you ask me, only high level, is it attractive? I would say yes.”
SoftBank wants to buy as much as a third of Swiss Re, according to people with knowledge of the subject. While the reinsurer has confirmed what the CEO called “very preliminary” discussions with the investor, Swiss Re had not said anything else about what he thinks of the offer.
They are reconfiguring Japanese mobile phone operator SoftBank into a technology investor, a move that could make Son follow the company’s titans, including Warren Buffett, who have bolstered their conglomerates with healthy reinsurance flows. SoftBank has raised $ 93 billion of the planned $ 100 billion for its Vision Fund, the world’s largest private equity group, and has taken stakes in companies, including Walk-Call, Chip Making, Office Exchange, the creation of satellite, decision-making robot and even indoor kale cultivation.
Swiss Re said on Friday it plans to increase its dividend and return an additional $ 1 billion to shareholders. After one of the most expensive years for strange meteorological phenomena in the registry, it almost annihilated the gains. Despite record claims last year, competitors such as Munich Re, the world’s largest reinsurer, have managed to maintain or increase shareholder payments.
“The outlook for our industry is now more positive than it has been for the past four years,” Mumenthaler said in the statement. “It is expected that changes in the market environment, such as the adjustment of property and accident price levels and increases in interest rates, will be beneficial for our business.”
The Zurich-based insurer has accumulated money in recent years when there were relatively few disaster claims, and completed a share repurchase of one billion francs earlier this month.
Swiss Re rose as much as 2.9 percent in Zurich operations and rose 2.8 percent to 97.74 francs from 9:33 a.m. That made it the best performance in the benchmark of the Swiss market. The stock has risen 6.5 percent in the last 12 months.
Reinsurers have raised their expectations that high demands can put an end to years of falling prices. The combined ratio in the property and casualty reinsurance unit of Swiss Re, the largest division, increased to 111.5 percent, as the climatic events of the year produced claims above average. A ratio greater than 100 percent means that more money is paid in claims than in premiums.
The total insured losses resulting from natural and man-made disasters in 2017 are expected to be around $ 136 billion, according to data collected by Swiss Re. That is the third highest since it began collecting records in 1970. It was mainly due to the three hurricanes – Harvey, Irma and Maria – that hit the United States and the Caribbean, and forest fires in California.
Other highlights of the results of the full year of Swiss Re:
Gross premium of the group were $ 34.8 billion vs. $ 35.6 billion a year Early group net profit dropped to $ 331 million, from $ 3.6 billion a year Previous dividend of 5 francs proposed for the Property unit and Accidents 2017 the Company’s revenue lost $ 3.7 billion of major natural disasters, including Harvey, Irma and Maria storms, earthquakes in Mexico and wildfires in California Corporate Solutions reported a loss of $ 741 million against a gain of $ 135 million one year earlier Life & Health Reinsurance reported a profit of $ 1.1 billion versus $ 807 million one year earlier