Swiss Re adds $2.4 billion to US liability reserves

Swiss Re Ltd. Thursday said it added $2.4 billion to its prior-year reserves for U.S. property/casualty business in the third quarter.

“The additions were partly offset by releases in other lines of business, resulting in a net prior-year reserve strengthening in P&C Re of $2 billion,” the reinsurer said in a statement.

Swiss Re added $3.1 billion to its reserves in the first nine months of the year, the statement said.

The reserve strengthening followed a review of the company’s property/casualty reserves “considering the latest industry data and legal trends,” CEO Andreas Berger said in the statement.

“We have reached our goal of positioning reserves at the higher end of the best-estimate range. Importantly, we have addressed reserve developments in our entire U.S. liability portfolio, including all prior underwriting years,” he said.

Swiss Re expects to report a profit of $100 million for the third quarter, compared with $1 billion in the same period last year.

The reinsurer has previously said that “social inflation,” or higher court awards and settlements, is driving up liability costs in the U.S. In September, it issued a report saying social inflation has increased the value of liability claims by 57% over the past decade.