Swiss Re, the world’s second largest reinsurer, confirmed that it suffered a net loss of CHF 165 million ($98.64 million) in 2001, compared to 2000 net income of CHF 2.966 billion ($1.77 billion). The company indicated that despite the losses its dividend payments would be maintained at the current level.
The losses, which Swiss Re forecast last February, were primarily due to “the after tax impact from 11 September” of CHF 2.951 billion [$1.764 billion] and a “reduction in net realised investment gains” of CHF 1.61 billion [$962 million].
The company indicated that “Excluding 11 September and the reduction in capital gains, 2001 was a year of positive progress for the Group’s operations. Net premiums earned were up 14% at CHF 25.2 billion [$15.06 billion] and once again return on investments exceeded the 7% target, despite a difficult year in the capital markets.”
Sept. 11 along with “other large man-made losses” combined with the global decline in equity values caused an 87 percent drop in the operating income of Swiss Re’s Property & Casualty Business Group to CHF 281 million [$168 million] in 2001 from CHF 2.164 billion [$1.29 billion] in 2000. The attacks in the U.S. alone increased Swiss Re’s combined ratio to 124%. Swiss Re stated that, “Without this impact, however, substantial progress was made as the combined ratio reduced to 110% from 117% in 2000.
Things are looking up, however, according to the report. “The hardening of the market, already visible in 2000, was actively built on by the business group during 2001 as net premiums earned rose 20% to CHF 13.8 billion [$8.25 billion]. Walter B. Kielholz, Swiss Re’s CEO commented that “Despite the worst year ever for insured losses, Swiss Re strengthened its position during 2001 and is now well placed to capitalise on improving markets and achieve superior results in the coming years.”
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