Swiss Re Slips into Red as 2026 Profit Target, Buyback Plans Miss Expectations

06:39 AM EST, 12/05/2025 (MT Newswires) -- Swiss Re (SREN.SW) saw its shares fall nearly 6% in Friday midday trade after unveiling its 2026 financial targets as part of a refreshed strategy, aiming to deliver $4.5 billion in group net income, which fell short of market expectations. From 2026, the Swiss reinsurance giant said it also plans to introduce an annual share buyback program of $500 million that would be carried out in a "sustainable" manner. The buyback remains subject to the group reaching its net income goal of more than $4.4 billion for full-year 2025. "As we look ahead, we continue to focus our efforts and resources firmly on our core markets. Conditions remain constructive, supported by structural growth. This puts us in a strong position for 2026 and beyond," Chief Executive Officer Andreas Berger said in a Friday statement. Analysts at RBC Capital Markets noted a negative sentiment on the reinsurer, saying the group net income target stands lower than the Visible Alpha consensus of $4.7 billion and its $4.6 billion forecast. Furthermore, the planned buyback came in below consensus and RBC's estimates of $1 billion. "Our expectations shifted after disappointing Q3 results, with a focus on P&C top-line outlook after worsening trends and reserving issues in Life & Health, even after large charges taken in 2024/25. A combination of poorer historical performance and worse growth outlook than its German peers (Hannover Re and Munich Re) mean we think Swiss Re deserves to trade at a discount to those peers, with all three currently trading on c.11x FY26E P/E," the research firm said, anticipating Swiss Re's share price to show weakness following the update. In the fourth quarter, the group expects an impact of $250 million in its IFRS pretax earnings following "assumption updates." For its life and health reinsurance segment, Swiss Re now anticipates a higher net income of $1.7 billion in 2026. It also completed the review of its underperforming portfolios at the division, particularly those in Australia, Israel and South Korea. Looking further ahead, the reinsurer still aims to achieve an annual dividend per share growth of at least 7% over the next two years and an IFRS return on equity target of over 14%. The group also maintained its operating cost reduction targets, highlighting that it is on track to meet its goal of a $300 million reduction in run-rate operating expenses by 2027. Swiss Re is set to release its full-year 2025 results on Feb. 27, 2026.