Swiss Re to raise up to CHF 5 billion
The reinsurer receives money from Warren Buffett after losses.ZURICH - The world's second-largest reinsurer Swiss Re said Thursday it expected to post net losses of CHF 1 billion (USD 860 million, EUR 672 million) in 2008, as it turned to Warren Buffett's Berkshire Hathaway for capital.
Berkshire Hathaway injected CHF 3 billion in the reinsurer while the group said another CHF 2 billion may be raised from shareholders to prevent a reduction of the reinsurer's current rating.
"The Group has surplus regulatory capital, but it estimates that at 31 December 2008 it was between CHF 1.5 and 2.0 billion below the level required to maintain its current 'AA' rating", it said in a statement.
"The Board of Directors has concluded that it is in the best interest of the Group to seek to re-establish a strong level of capital. Based on current estimates, the total amount of capital to be raised is likely to be up to CHF 5.0 billion," added the reinsurer.
Swiss Re chief executive Jacques Aigrain said he was "disappointed" with the results but added that the company's core insurance businesses are "doing well".
[AFP / Expatica]