Swiss Re to exit loss-making digital white-label business
Recasts with focus on business exit; adds comments from CFO
By Tom Sims and Paul Arnold
FRANKFURT, May 16 (Reuters) -Reinsurance company Swiss Re SRENH.S said on Thursday that it would exit its loss-making digital white-label business after a strategic review and could incur restructuring costs in the coming quarters.
Swiss Re said it would "consider options" for the so-called iptiQ business in which its insurance products can be marketed and sold under a partner's own brand.
The world's No. 2 reinsurer has seen outsider interest for the business and sales are possible, Chief Financial Officer John Dacey told journalists.
The company could incur some restructuring costs as a result over the coming quarters and the amount "depends on how this plays out," he said, but the company's full-year profit target was not at risk.
Swiss Re began the white-label business nine years ago and recently expanded to new geographies. Over the last two years, it lost more than $600 million and was expected to post a loss for 2024 as well.
"The market environment today is vastly different from the one when iptiQ was created," said Chief Executive Officer Christian Mumenthaler. "We've concluded we are not the best owners of this business."
Swiss Re made the announcement as part of its first-quarter earnings report.
It generated a better than-expected net profit of $1.1 billion in the period. The figure was not comparable with the year earlier figure because of a change in accounting standards, but analysts had expected a profit of $961 million, according to a consensus forecast.
Swiss Re said first-quarter profit was helped by strong investment income.
Shares in the company were up 2.5% early on Thursday.
($1 = 0.9189 euros)
Reporting by Tom Sims and Paul Arnold, editing by Andrey Sychev and Hugh Lawson
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