Swiss Re reports $1.5 billion Q4 loss

20 February 2009

Swiss Reinsurance Co on Thursday reported a 1.75 billion Swiss francs ($1.5 billion) loss in the fourth quarter (October-December) of 2008, hit by a series of risky investment. The loss compares with net profit of 170 million Swiss francs in the fourth quarter of 2007.

For the full year 2008, Swiss Re reported a net loss of 864 million Swiss francs, compared to a net profit of 4.2 billion Swiss francs in 2007. Earnings per share were -2.61 Swiss francs compared to 11.95 Swiss francs in 2007 and return on equity was -3.4 per cent compared to 13.5 per cent in 2007.

Swiss Re said its its losses offset strong underwriting performance, adding that it is determined to further de-risk asset portfolio and reinforce capital position.

''This result is clearly disappointing. Although our Property & Casualty and Life & Health business segments continue to perform extremely well even in these adverse conditions, the result has been impacted by investment losses,'' Stefan Lippe, Swiss Re's chief executive, said.

''We have already taken extensive measures to de-risk the investment portfolio and to further protect the long-term financial strength of the company. These measures are all contributing to building a stronger firm for the years to come,''  he added.

Shareholders' equity decreased to 20.5 billion Swiss francs from 31.9 billion Swiss francs at the end of 2007, primarily due to the loss for the year, unrealised losses on investments, and the impact of exchange rate movements. Book value per share decreased to 60.96 Swiss francs compared to 92.00 Swiss francs at the end of 2007.