Swiss Re first quarter profit dampened by disaster damage

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One of the world's biggest reinsurers, Swiss Re, on Thursday reported a 21 percent increase in first quarter net profit although its results were dampened by losses from Chile's earthquake and European storm Xynthyia.

Net profit reached 158 million dollars (142 million dollars) in the first three months of 2009 against 130 million dollars a year earlier, the company said in a statement.

"In the first quarter of 2010, we continued to deliver strong underlying performance, even though the result was impacted by high natural catastrophe losses, mainly from the earthquake in Chile and European winter storm Xynthia," said chief executive Stefan Lippe.

"While natural catastrophes like these can contribute to earnings volatility, protecting our clients against such extreme events is the essence of our business model," he added.

The reinsurer provisionally estimated that it would have to foot about 200 million dollars of losses from the Deepwater Horizon oil rig blast in the Gulf of Mexico on April 20.

The total insurance industry payout could reach 1.5 billion to 3.5 billion dollars, it added in a provisional estimate of the cost of the disaster to the industry.

© 2010 AFP

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