Swiss Re Reports Quarterly Net Profit Reversing A Loss

NU Online News Service, Nov. 3, 11:35 a.m. EST

Swiss Re reported third quarter net income of 334 million Swiss francs (U.S. $324 million at the current exchange rate) resulting from a mild catastrophe season and disciplined underwriting, the company said.

The results compare to a loss of 304 million francs for the same period last year ($259 million), the Zurich, Switzerland-based insurer said.

Stefan Lippe, Swiss Re's Chief Executive Officer, said in a statement, "During the third quarter of 2009, we continued to improve Swiss Re's financial flexibility through a combination of strong underlying performance in our core business and continued de-risking of the Legacy activities."

He added that company excess capital is substantial.

George Quinn, Swiss Re's chief financial officer said the company reported a profit despite some of the issues that plagued it in the second quarter, such as hedging of corporate bonds.

"Our core businesses have all performed well in the third quarter," he said, noting that property and casualty business produced a combined ratio of 84.5 (a 15.1 point improvement) thanks in part to the benign catastrophe season and disciplined underwriting.

He also credited the performance of its life and health business that reported a benefit ratio of 80 percent which reflects the "work of people in that business."

Operating income for the p&c business increased from 685 million francs ($664 million) for the third quarter last year to 998 million francs ($968 million) this quarter.

"The outlook for our company is encouraging," said Mr. Lippe. "In the first nine months of 2009, we restored our capital position. Our underlying performance remains very strong and we have achieved significant progress in de-risking our Legacy portfolio. The excellent underwriting results, which we have consistently delivered over many years, demonstrate our disciplined underwriting approach."

Mr. Lippe added: "Our focus now is on the January renewals. While the market fundamentals point towards higher prices, restored industry capital and the absence of hurricanes may partially delay the market correction. With our very profitable reinsurance portfolio and proven underwriting track record, we are well placed for the upcoming renewal season."