Swiss Re 2000 Profits Rose 21 % To $1.74 Billion

April 27, 2001

Swiss Re’s 2000 net profits rose 21 percent to SwFrs. 2.966 billion ($1.74 billion) on strong growth in all sectors, life, non-life, and return on investments. The company also announced a 20-for-1 stock split designed to “increase the liquidity of the stock in the marketplace.”

Property/casualty reinsurance results showed the best improvement. Earned premium income rose 29 percent to SwFrs.11.5 billion ($6.75 billion),”mainly due to the consolidation of Underwriters Re in the US and to growth in Europe.” Investment earnings increased 22 percent and life reinsurance rose 14 percent. Swiss Re’s combined ration on p/c reinsurance improved from 122 percent to 117 percent.

Over a year ago Swiss Re announced cost cutting measures and a more disciplined underwriting policy in an effort to increase profitability. The initiatives seem to have been successful. Net earnings would have been even higher had not the company made a decision to strengthen its reserves.

Results were also helped by the fact that according to Swiss Re global natural catastrophe insured losses decreased to just over $10 billion last year from over $30 billion in 1999.

The present upswing in reinsurance rates seems to have improved the future outlook for most reinsurers. “Swiss Re confidently expects to see further sharp improvements in the performance of the non-life business, with the end of one of the most severe periods of soft market conditions ever experienced in the cyclical non-life reinsurance business,” said the company.

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