NU Online News Service, May 7, 2:09 p.m. EDT

After reporting a net loss for 2008, Zurich, Switzerland-based carrier Swiss Re celebrated a return to profitability in the first quarter, despite a 76 percent drop in net income from the same period a year before.

For 2008, the company reported a net loss of CHF 864 million ($736 million at the time of its reporting) primarily based on investment losses.

The property-casualty business exhibited the most improvement with a combined ratio improving 6.2 points to 90.2 in the quarter. Premiums earned rose 5 percent, or CHF 201 million, to CHF 3.88 billion ($3.44 billion).

Swiss Re said the segment's results were driven by "premium growth, excellent underwriting performance and favorable claims experience." The company added that strong renewals at the beginning of the year pointed to stronger pricing "in several major business lines."

However, the investment operations suffered a 60 percent decline, compared to the same period last year of CHF 1.67 billion to CHF 1.12 billion ($995 million).

The company said that it continues to refocus its investment strategy shifting into cash, short-term and government-backed securities.

The company reported net income dropped CHF 474 million ($419 million at the current exchange rate), to CHF 150 million ($133 million), or CHF 0.45 (40-cents) a share.

"We are pleased to report that Swiss Re was able to return to profit in the first quarter of 2009," Stefan Lippe, Swiss Re's chief executive officer said in a statement. "More importantly, we strengthened our capital base and made progress on our plans to reduce risk. The results show that even in this challenging economic environment Swiss Re's earnings power in its core business remains strong."

Mr. Lippe said the company is continuing with a strategy to restore its capital position and make less risky investments. It also plans to reorganize the company in an effort to reduce costs.

Last month, Swiss Re said it would eliminate 1,150 positions and named a new chief operating officer.

"It will take some time to reduce the asset risk in our portfolios, and we may suffer volatility in the process," Mr. Lippe said. "However, we see increased demand and reduce capacity in the (re)insurance market driving prices higher. Swiss Re is in a strong position to seize such market opportunities."

Special Reports /

Swiss Re Sees 1Q Profit, Despite 76% Net Income Drop

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