Swiss Re Shares Drop After New Profit Target Falls Short of Expectations

Swiss Re shares dropped 7.5% on Friday after the world’s second-largest reinsurer announced a new profit target that fell short of market expectations.

The Zurich-based company said it was aiming for group net income of $4.5 billion next year, up from an expected $4.4 billion in 2025, but less than the $4.81 billion forecast by analysts, according to a consensus compiled by Visible Alpha.

Swiss Re’s stock was the worst performer on the Stoxx Europe 600 Index .SXIP, which was 0.4% lower. At 1211 GMT, its stock was 5.6% lower at 130.75 Swiss francs.

Analysts were also disappointed with the size of Swiss Re’s new $500 million share buyback, the company’s first since it completed a 1 billion Swiss franc ($1.3 billion) scheme in 2020.

“Today’s statements by Swiss Re are generally somewhat below expectations, particularly with regard to the 2026 profit target and the volume of the planned share buybacks,” said Zuercher Kantonalbank analyst Georg Marti.

CEO Andreas Berger defended the profit target, saying market conditions were not easy.

“Could we do more? Perhaps,” he said. “But I don’t want to squeeze the lemon dry.”

Swiss Re was also approached every week with potential takeover targets, he added.

“We are open to inorganic opportunities,” Berger told analysts at its investor day. “I’d like to keep some powder dry.”

Earlier on Friday, Swiss Re, which competes with Germany’s Munich Re, said it was now targeting net income of $1.7 billion from its life and health segment next year, after dropping its 2025 target for $1.6 billion last month.

It said it had completed a review of its underperforming portfolios in Australia, Israel and South Korea, and that it expected fourth-quarter pretax earnings to be reduced by $250 million following an “assumption update.”

($1 = 0.8020 Swiss francs)

(Reporting by John Revill; editing by Emelia Sithole-Matarise and Mark Potter)