Swiss Re seeks Buffett aid as losses projected
Swiss Re has announced projected net losses of SFr1 billion ($860 million) for 2008, to be cushioned by renewed investment from billionaire Warren Buffett.
The world’s second-largest reinsurer said on Thursday that it would be taking “significant” measures to reinforce its capital strength to remedy its situation.
Buffett’s Berkshire Hathaway conglomerate holding company, which bought a three per cent stake in Swiss Re in 2008, will invest a further SFr3 billion subject to shareholder approval.
The group is also considering raising further equity of SFr2 billion.
Swiss Re wrote down SFr6 billion in toxic assets in 2008 as its shareholder equity dropped. Thursday’s announcement came earlier than expected and follows pressure on its shares in recent weeks as investors worry about possible writedowns and the need for more capital.
Swiss Re CEO Jacques Aigrain said the group was disappointed with the overall results but the underlying operating performance was “excellent”.
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