Swiss Re
Note: This is a daily stock update and the information stands true as of 07/11/24, 09:00 CET.
Company Update:
Expert Opinion:
This is not a massive surprise considering Munich RE profit warning a couple of weeks ago and the recent events in the US. While this may impact negatively the share price, bear in mind reinsurance bread and butter is actually those tail events and due to its oligopolistic situation, players are able to increase prices to pass on those increased costs. The risk for the sector is the potential arrival of newcomers wishing to take a part of the business and pushing prices down but so far we don’t see that happening. In all, we still like the sector for its resilience over the long run. Any significant drop in share price would rather be an opportunity to jump in. We don’t see any risk that the dividend being cut.
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Company Update:
Swiss Re announced that it will have to increase its level of provisioning in the US by $2.4bn (bringing the total to $3.1bn over 9 months) due to the higher P&C claims that are expected due to recent events.
In all Q3 net income should come in at $100m, v.s. a consensus at $835m.
FY Guidance adjusted down with net income above $3bn v.s. $3.6bn previously.
Expert Opinion:
This is not a massive surprise considering Munich RE profit warning a couple of weeks ago and the recent events in the US. While this may impact negatively the share price, bear in mind reinsurance bread and butter is actually those tail events and due to its oligopolistic situation, players are able to increase prices to pass on those increased costs. The risk for the sector is the potential arrival of newcomers wishing to take a part of the business and pushing prices down but so far we don’t see that happening. In all, we still like the sector for its resilience over the long run. Any significant drop in share price would rather be an opportunity to jump in. We don’t see any risk that the dividend being cut.
For daily updates, subscribe to our newsletter and for detailed daily updates, reach out to us at sales@alphavalue.eu
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