Swiss Re Estimates Its Tianjin Port Explosion Losses Will Hit $250 Million

Swiss Re AG, the world’s second-largest reinsurer, posted a 13 percent increase in third-quarter profit after allowing for $250 million in losses from the chemical warehouse explosions in the Chinese city of Tianjin in mid- August.

Net income climbed $1.4 billion from $1.2 billion a year earlier, the Zurich-based company said in a statement Thursday. That beat the $840 million average estimate of seven analysts compiled by Bloomberg.

Swiss Re is the first major reinsurance company to declare losses over the disaster, providing an indication of the final bill for the industry. Munich Re, the world’s largest reinsurer, reports earnings next week, as do SCOR SE and Hannover Re.

The explosions were probably one of the costliest man-made disasters ever in Asia, reinsurance brokerage Guy Carpenter said last month, estimating combined losses to insurance and reinsurance companies of between $1.6 billion and $3.3 billion. Zurich Insurance Group AG abandoned its proposed bid for British insurer RSA Insurance Group plc last month after forecasting losses of about $275 million from Tianjin.

Validus Holdings Ltd. expects the explosions set it back $44 million. PartnerRe Ltd., which like Validus is based in Bermuda, recorded $60 million in losses from Tianjin during the third quarter.

A series of explosions at a chemical storage depot on Aug. 12 leveled part of Tianjin’s port district, destroying warehouses, factories, shipping containers and thousands of new cars. Tianjin officials said 173 people were killed.

One of China’s worst industrial disasters, it illustrates the dangers insurers face from increased risks in expanding industrial areas. Tianjin is the third-largest port in the world and serves as Beijing’s seaport.

Related:

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• PartnerRe Estimates China’s Tianjin Explosions to Cost Between $50m and $70M
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• Fitch’s Rendez-Vous Roundup: 4 Hot Topics Affecting Reinsurance Industry
• Zurich Abandons $8.7B Takeover of RSA After Forecasting Losses in P/C Business
• Cost of Tianjin Explosions Could Reach $3.3 Billion: Guy Carpenter
• Insurers Unlikely to Be Impaired by Claims From Tianjin Port Explosion: S&P
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