The Swiss Reinsurance Company has reported a 16 per cent rise in first-half net profit, driven by fewer claims linked to natural disasters and investment income.
The Zurich-based company, which recently bought the reinsurance operations from General Electric, announced on Friday that profit had risen to SFr1.57 billion ($1.3 billion) from SFr1.35 billion a year earlier.
Total premiums earned rose 4.9 per cent to SFr13.8 billion compared with SFr13.2 billion a year earlier, the world's largest reinsurer said in a statement.
The company also reported a 13 per cent rise in income from investment to SFr2.8 billion, against SFr2.5 billion for the same period in 2005, helped by exchange rate gains and the June takeover of General Electric's Insurance Solutions unit.
"Swiss Re's diversification and continued focus on sound technical results, along with the transfer of peak risks to the capital markets, have clearly reinforced the quality and sustainability of our earnings," said Jacques Aigrain, Swiss Re's chief executive officer.
"The earnings are solid, and there are no negative surprises as the company didn't have to increase prior-year reserves as in the recent past," commented Andreas Frick, an analyst at Lombard Odier Darier Hentsch.
The group announced it was well positioned ahead of the costly United States hurricane season in the second-half of the year.
Rates for the catastrophe-exposed property and specialty reinsurance business have risen substantially...while other property and casualty reinsurance markets are expected to remain stable at profitable levels, the statement added.
The positive news follows Swiss Re's purchase of General Electric's reinsurance operations for $7.4 billion in June, putting it ahead of German rival Munich Re as the industry's number one.
Swiss Re is confident that the integration of US-based GE Insurance Solutions and the current streamlining of the organisation will further drive growth.
The company told reporters on Friday that it had raised its estimate for cost synergies from the deal to more than $300 million by the end of 2007.
It also reconfirmed its estimate of $250 million in restructuring costs from the transaction as it cuts staff but said that further efficiency measures would be announced in the autumn.
In July Swiss Re announced it would axe up to 2,000 jobs, one in five of its workforce, by 2007 following its takeover of GE Insurance Solutions.
By October 2006 the company plans to finalise the two-phase restructuring of its worldwide operations.
swissinfo with agencies
Reinsurance is basically the business of insuring the insurers. 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.
The deal with GE Insurance Solutions will bring Swiss Re's estimated combined revenues to SFr46 billion and assets of SFr265 billion (as of June 2005).
Results for the first half of 2006
Net income: SFr1.57 billion (+16%)
Income from investment: SFr2.8 billion
Annualised return on equity: 13.9%
Basic earnings per share: SFr4.92
Number of employees (combined groups): 11,400
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