Swiss Re shares rose 6.6% on Thursday morning in European trading after the company increased its U.S. liability reserves by $2.4 billion in the third quarter. The reinsurance giant aimed to reassure investors about the adequacy of its reserves, which are now positioned at the 90th percentile, according to the company.
The move comes as Swiss Re addresses concerns that have long pressured its stock performance. J.P. Morgan analysts suggested the reserve increase should quell investor doubts and restore confidence in Swiss Re’s ability to meet its future obligations. Analysts from Jefferies, meanwhile, noted that the company’s historically weak casualty reserves have weighed on its shares, and this boost could improve stock performance.
Despite a liability reserve-related outlook downgrade, Swiss Re remains on track to achieve over $3 billion in net income this year, compared to its earlier guidance of $3.6 billion. Analysts at J.P. Morgan highlighted that, despite recent challenges, the company’s underlying profitability remains robust.