Swiss Re returns strong profit in third quarter
Zurich-based reinsurer Swiss Re posts CHF 334 million net income in the third quarter.Zurich -- Swiss Re, one of the world's biggest reinsurers, on Tuesday returned to strong profit in the third quarter, turning away from losses that had depressed the group's outlook for 2009.
Swiss Re posted CHF 334 million (EUR 221 million, USD 326 million) net income in the third quarter, the company said in a statement.
"The outlook for our company is encouraging. In the first nine months of 2009, we restored our capital position," said chief executive Stefan Lippe.
The Zurich-based group was severely hit by the financial crisis and has been struggling to regain profitability.
The result, which compared with a CHF 304 million loss in the same period in 2008, was towards the upper end of analysts' expectations.
Net premiums earned fell by 11 percent to CHF 5.84 billion in the third quarter.
But the group reported growth in net operating income of CHF 388 million in life and health insurance, and CHF 998 million in property and casualty, partly due to low levels of natural catastrophes in the third quarter.
After a record annual loss of CHF 864 million in 2008, Swiss Re appeared to progress in 2009 when it reported a CHF 150 million profit during the first three months.
But a heavy CHF 381 million loss in the second quarter, largely blamed on its financial ventures rather than its reinsurance business, had lowered the company's outlook for 2009.
Swiss Re warned in August that future earnings could continue to be influenced by financial market trends, despite improving conditions in reinsurance markets.
Lippe on Tuesday described the performance of its core reinsurance business as "strong" while the company had also collected "substantial" excess capital so far in 2009.
The group suffered CHF 1.2 billion in losses from the US subprime home loan crisis, forcing it to turn to American investor Warren Buffett to boost its finances, most recently with a CHF 3.0 billion investment in February.
Chief executive Jacques Aigrain and chairman Peter Forstmoser later resigned after Aigrain was widely blamed for having led the reinsurer into the risky world of investment banking after he took over in 2006.
Lippe said the company was now aiming for insurance renewals in January 2010.
"While the market fundamentals point towards higher prices, restored industry capital and the absence of hurricanes may partially delay the market correction," Lippe said.
"With our very profitable reinsurance portfolio and proven underwriting track record, we are well-placed for the upcoming renewal season," he added.
Swiss Re has announced about 1,000 job cuts worldwide to trim costs. The group now expects its restructuring plan to yield CHF 150 million to CHF 200 million in savings.
AFP / Expatica