Swiss Re nearly doubles profits and repays Buffett
Swiss Re, one of the world's biggest insurers on Thursday reported a near doubling of its third-quarter net profit, allowing it to repay crisis funding from US billionaire Warren Buffett.
Swiss Re said in a statement that third-quarter net profit reached 618 million dollars (440 million euros), a 97-percent increase over the same period last year and well above analysts' expectations.
The company, a pillar of the global reinsurance industry, has gradually been rebuilding its capital base in a business turnaround since it shed the risky investment policy that left it trembling about two years ago.
In 2008, Swiss Re posted its biggest-ever loss of 864 million Swiss francs, forcing the group to turn to Wall Street sage Warren Buffett's Berkshire Hathaway for fresh funds in the form of a 20 percent stake in the company.
"Today we are pleased to report that our improved capital position allowed us to reach an agreement to repay Berkshire Hathaway, with no additional charge for bringing forward the repayment date." Swiss Re chief executive Stefan Lippe said in a statement.
The repayment is effectively being made five months ahead of schedule.
Swiss Re said interest charges and a 20-percent premium on the Berkshire Hathaway capital of about one billion dollars would be booked onto its accounts in the final quarter of 2010.
The group's core property and casualty business grew in the third quarter with operating income of 1.1 billion dollars, despite 160 million dollars in costs from September's earthquake in New Zealand, the biggest to hit the country in almost 80 years.
Swiss Re also described the natural catastrophe season -- mainly Caribbean hurricanes and Pacific basin typhoons -- as "benign" in terms of insured losses so far this year.
Analysts polled by business news agency AWP had forecast an average net profit of 457 million dollars in the third quarter.
The group said it would still hold "significant excess capital" after Berkshire Hathaway's withdrawal.
"We have delivered on our promises and successfully turned around the company's performance," said Lippe.
© 2010 AFP