The exceptional investment gains it achieved last year, over $2 billion, had a negative impact on Swiss Re’s 1st half results this year, as it reported an overall decrease of $975 million. Pre-tax operating income, however, rose a total of 43 percent to $767 million.
Swiss Re’s three business groups, Non-Life, Life & Health and Financial Services all showed increases for the period. Non-Life Business Group net premiums were up 25 percent to Sw Frs. 6.458 billion ($3.78 billion) and operating income rose 10 percent to $303 million. Swiss re said that the inclusion of Underwriters Re, which it acquired last year “added 5 percentage points to Non-Life premium income growth.”
In another positive development the company’s combined ratio fell to 107.2 percent, down from 117 percent, and well with reach of the announced target of 107 percent. Swiss Re attributed its success to its cost cutting initiatives and increasingly rigorous underwriting standards coupled with rate improvements on new and renewal business beginning in the fourth quarter of 2000.
Swiss Re also confirmed that it intends to issue 28.5 million additional shares to raise the approximately $2 billion needed to finance the purchase of Lincoln Re, announced last month. A special shareholders meeting is scheduled for September 27th to consider the proposal.
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