Swiss Re confirms large FY loss, writedowns
Zurich, February 19, 2009
Swiss Re, the world's biggest reinsurer, posted a net loss of 864 million Swiss francs ($735.63 million) and 5.9 billion francs in writedowns for 2008, and said it aims to maintain capital in the AA range in the long-term.
The company is targeting a combined ratio of 95 percent for 2009, it said on Thursday, adding that it aims to save 200 million francs in costs in 2009 and 400 million by the end of 2010.
Swiss Re replaced its chief executive, Jacques Aigrain, with industry veteran Stefan Lippe last week in a bid to steer it back to reinsurance basics following a surprise preliminary announcement of a large full-year loss and hefty writedowns.
Shares in the Zurich-based reinsurer, which is disbanding its financial markets activities, have slumped 66 percent this year, clearly underperforming rivals.
The writedowns forced Swiss Re to take a 3 billion franc investment from Warren Buffett's Berkshire Hathaway on unattractive terms and propose a further 2 billion franc capital hike from a rights offer to existing shareholders.
The additional capital was not enough to save Swiss Re's AA rating, seen as key for attracting new reinsurance business. Ratings agency S&P cut its rating to A+ on Wednesday because of the larger-than-anticipated capital depletion in 2008. - Reuters