Swiss Re profits soar 74%

17th February 2011, Comments 0 comments

Swiss Re, one of the world's biggest reinsurers, said Thursday its 2010 net profit soared 74 percent to $863 million (635 million euros) but it still fell well short of analyst forecasts.

Analysts had expected $1.2 billion in profits for 2010.

The group's property and casualty underwriting services were hurt by high natural disaster claims, with operating income down 30 percent.

Floods in Queensland, Australia, were expected to cost $100 million in the fourth quarter, with another $225 million in claims coming in this year.

In addition, claims from Australian cyclone Yasi were seen reaching $100 million.

Nevertheless, 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 shaken two years ago.

In 2008, Swiss Re posted its biggest-ever loss of 864 million Swiss francs ($901 million, 665 million euros), 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.

In November 2010, it announced that it had repaid Berkshire Hathaway.

The group said that if impact of the Berkshire Hathaway repayment was excluded from its 2010 earnings, then net income was at 2.3 billion dollars.

Swiss Re also moved to reassure investors, saying that its capital stood at over $10 billion in excess of ratings agency Standard & Poor's 'AA' requirements at the end of 2010.

It added that it would propose a dividend of 2.75 francs share, described by analysts at Bank Vontobel as "solid."

In morning trade, the stock was up 1.25 percent at 56.70 francs, outperforming a weak Swiss Market Index which was down 0.17 percent.

© 2011 AFP

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