Swiss Re profit doubles
The Swiss Reinsurance Company has doubled its net profit in 2006, helped by low claims and the acquisition of the reinsurance units of General Electric.
The world’s largest reinsurer revealed the results on Thursday as it launched a SFr6-billion ($4.92-billion) share buyback.
Net profit was up from SFr2.3 billion in 2005 and the company, which insures other insurers, also increased its dividend to SFr3.40 per share, up 36 per cent.
It said synergies from the SFr7.4 billion acquisition from General Electric would beat its original target of SFr390 million and would now exceed SFr460 million by 2008.
“2006 is a significant step in Swiss Re’s path to sustained growth in earnings and demonstrates our commitment to superior returns,” said Jacques Aigrain, Swiss Re’s CEO.
“With net income of SFr4.6 billion, Swiss Re achieved a record result, based on disciplined underwriting in property and casualty, consistent returns from life and health and a rising contribution from our financial services business.”
Swiss Re also said its combined ratio of costs and claims over premium income improved to 90.4 per cent, helped by low claims after hurricanes in the United States turned 2005 into the costliest year on record for the reinsurance industry.
Analysts had been hoping for a fat pay-out from Swiss Re after primary insurers such as Zurich Financial Services and Germany’s Allianz bumped up dividends.
Acquisitions
Swiss Re is one of the few major reinsurers showing solid growth because of a number of acquisitions. Its shares have traded roughly flat this year, in line with the Dow Jones Stoxx index.
“The acquisition and smooth integration of insurance solutions and more recently the [completion of the deal concerning] GE Life UK demonstrate our strengths in organisational excellence,” Aigrin said.
“Based upon Swiss Re’s strong financial position and our confidence in driving sustainable earnings growth, Swiss Re plans a share buy-back programme and proposes to increase its dividend.”
swissinfo with agencies
Swiss Re insures large or very volatile risks for other insurance companies. Its major competitor is Munich Re of Germany.
Apart from being the number one in the reinsurance business, Swiss Re is the world’s largest life and health reinsurer.
Swiss Re has been in the business of reinsurance since it was founded in Zurich in 1863.
Swiss Re, based in Zurich, is the world’s largest reinsurer, which is basically the business of insuring the insurers.
Founded in 1863, it operates through offices in more than 30 countries.
The company reported net profit of SFr1.5 billion in 2005 in a year characterised by natural catastrophes.
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