Swiss Re, the world's second biggest reinsurance group, has seen its net profit for 1999 increase to just over SFr2.8 billion. The rise in earnings just matched the expecations of analysts.
The growth in profit came despite a year which saw heavy winter storms in Europe that added around SFr 900 million to the company's claims burden.
"We've achieved it because we were prepared," says Swiss Re's chief financial officer, John Fitzpatrick.
"The life insurance result more than doubled. The investment result was up more than 20 per cent and those two factors had a lot to do with why we were able to report earnings up 12 per cent despite the large catastrophe losses in the world that did affect us," he said.
But the claims incurred from Europe's bad weather as well as earthquakes in Taiwan and Turkey and Hurricane Andrew won't be without consequence.
"What we think will happen is that prices will have to rise both at the re-insurance level but also at the underlying level that the insurance companies charge," Fitzpatrick said.
Like other companies in the sector, Swiss Re is also planning major investments in e-commerce. It will put around one per cent of premiums into e-business in the next two years to make its internal processes fit for the challenge.
"We think that the e-commerce impact is going to be significant," Fitzpatrick added.
"Most of the effect so far has been at the front end of the industry where retail clients are being attracted into internet sites for basic products but as time passes the new technologies will be applied at the back end of the industry and there's lots of room for improvement that would reduce costs for our customers."
Swiss Re anticipates continued growth in its life business during the current year and further high investment returns.
It also says that non-life divisions should fare better with a much lower frequency of high claims in the first quarter of this year and the expectation that there would be few, if any, claims arising from the Y2K computer bug.
But so far, investors have greeted Swiss Re's results with muted enthusiasm since other insurance companies have already released results that far exceeded - rather than just matched - expectations.
by Michael Hollingdale