Swiss Re profits down more than 50 per cent
Earnings at Swiss Re fell by more than half in the first six months of the year, with net profit down to SFr1.35 billion ($800 million) compared with SFr3 billion for the same period last year.
Swiss Re, the world’s second biggest re-insurer, said net investment gains slumped to SFr884 million from a level of SFr3.43 billion in the comparable period.
In a statement, Swiss Re said it had fully expected the scale of its net earnings decline. The company made huge investment gains early in 2000 when it swapped a large part of its equity portfolio for bond holdings when the stock markets were at a cyclical high.
Swiss Re added it was confident about the recovery of the reinsurance market, forecasting an improvement in the second half if the year. It said its SFr3.4 billion acquisition of the US company Lincoln Re would strengthen the group’s leading position in life and health insurance.
The company plans to issue up to 28.5 million new shares over the next two years to help finance the deal.
Swiss Re said it was also satisfied with continued growth in the firm’s core business. Net premium income rose to SFr11.9 billion from SFr9.96 billion.
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