Profit falls and CEO to leave at Swiss Re
Swiss Re has announced a management shake-up, saying its chief executive would retire after first-half profit missed expectations and premium income fell.
The world’s second-largest reinsurer, based in Zurich, said net profit fell to SFr1.353 billion ($1.07 billion) from SFr1.441 billion a year ago.
Profit missed the SFr1.43 billion average of ten analysts surveyed by Bloomberg.
In a statement Swiss Re said that chief executive John Coomber would retire at the end of the year and make room for Jacques Aigrain, currently the company’s deputy CEO.
Coomber said in June that the company was focusing on only the most profitable business as prices decline for some policies.
Combined ratio
That has helped the combined ratio, a key profitability gauge in non-life insurance, which improved to 95.5 per cent from 96.1 per cent, a sign the underwriting business became more profitable.
The statement added that the company was well positioned to sustain its good operating performance for the full year 2005.
Appointed in 2003, Coomber led the company back to profitability after two loss-making years and recently split the group into three business segments to boost growth and profits.
Swiss Re and rivals including Munich Re were hurt earlier this decade by claims related to the terrorist attacks on the United States in 2001 and by falling stock markets that led to investment writedowns.
Operating income in the group’s core property and casualty business unit dropped to SFr1.1 billion from SFr1.5 billion a year ago, due to lower realised capital gains.
Group level
At the group level, premiums earned fell four per cent to SFr13.2 billion as the company refused to sell business at excessively low prices.
“Profit is lower than expected, so that’s a negative. But operational performance seems to be okay,” commented insurance analyst Georg Marti at the Zurich cantonal bank.
Shares in Swiss Re have suffered this year after the company ruled out returning surplus capital to shareholders and as markets doubted it could repeat its investment gains.
swissinfo with agencies
First-half figures
Net profit: SFr1.353 (-6 per cent)
Net premiums: SFr13.2 billion (-7 per cent)
Return on equity: 13 per cent
Earnings per share: SFr4.37
Number of employees: 8,505
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