Swiss Re Earnings: Strong Profit in Half 1. We Raise Our Full-Year Earnings Forecast.

Despite the market's reaction after Swiss Re’s first-half 2023 earnings report, we believe the results are good. In summary, the company reported net income of a little over $1.4 billion for the first half of the year, delivering a return on equity for these six months of 11.3%. This means that if Swiss Re can remain in the black over the second half, it will deliver economic profit because we apply a 10% cost of capital. Second-half earnings always tend to be lighter because of the heavy natural catastrophe season in the third quarter, but we would anticipate that a full-year return on equity of about 13.5% is a reasonably conservative assumption. That would be the first year in over five years that Swiss Re delivered excess returns. Earnings per share were $4.75 for the first six months, and we believe the company delivered about $2.12 per share in the first quarter. That indicates $2.63 per share for the latest three months, less than the $2.92 Refinitiv-collected consensus.