Swiss Re’s $1.1 Billion Loss Adds to Covid Damage for Insurers

(Bloomberg) --

The cost of coronavirus for insurers is mounting.

Swiss Re saw Covid-related claims and reserves -- money set aside against potential future payouts -- reach $2.5 billion in the first half, resulting in a loss of about $1.1 billion, according to a statement on Wednesday. French insurer Scor SE followed on Thursday with an estimated Covid cost of 456 million euros ($528 million) in the second quarter. London-based Beazley Plc estimated losses related to the pandemic at $170 million.

Insurers and reinsurers are trying to contain the damage by setting aside enough money to cover future claims even though there’s a high level of uncertainty about what the final cost will be. Swiss Re Chief Financial Officer John Dacey raised concerns about the unknown quantity of the pandemic, comments that echoed those of another reinsurance giant, Munich Re, earlier this week. The German firm reported second-quarter losses of about 700 million euros in reinsurance related to the outbreak.

Lloyd’s of London estimated in May that the insurance industry will suffer about $203 billion in losses from the pandemic this year, with about $107 billion coming from underwriting claims and the rest from insurers’ investment portfolios.

The prospect of losses on that scale have prompted insurers and governments to start looking for ways to protect against future pandemics and global threats. The French government is looking at ways to shield companies and jobs from the damage that such major events can cause. Lloyd’s of London has led the industry’s call for the creation of new insurance policies and government-backed funds.

©2020 Bloomberg L.P.