Navigation

Equity losses push Swiss Re into the red

CEO John Coomber denied that a capital increase was planned. Swiss Re

Swiss Re says it expects to post a loss of SFr100 million ($73.4 million) for 2002 because of poorly performing investments.

This content was published on February 26, 2003 - 16:24

The world's second-largest reinsurer said it would be cutting its dividend for the first time in nearly a century.

Swiss Re said the loss was due to heavy write-downs on its equity portfolio.

The value of its stock investments fell by SFr3.4 billion - a figure five times higher than in 2001. It also booked a SFr250 million write down on its bond portfolio.

The news knocked nearly ten per cent off Swiss Re's share price on Wednesday.

Analysts said the stock was being hammered by concerns over the lower dividend and fears that the company would seek a capital increase.

But Swiss Re CEO, John Coomber, said he had no plans to ask investors for more money. "We can live within our means."

The company declined to comment on how much dividend it would pay for 2002, but said it spend SFr776 million in 2001 to pay a dividend of SFr2.50 per share.

The last time Swiss Re cut its dividend was after the San Francisco earthquake of 1906.

Volatile

Swiss Re said its investments were now much less exposed to volatile equity markets, with only eight per cent of its portfolio in stocks compared with 20 per cent at the beginning of the year, when it had SFr19 billion in equities.

Unlike its competitors, such as Munich Re, the Swiss insurer said its reserves were strong.

It admitted that it would be booking a SFr280 million charge into its year-end results to cover US-equity linked life insurance policies, but said its reserves for asbestos-related claims were higher than the industry average.

swissinfo with agencies

Swiss Re facts

Swiss Re said the value of its stock investments fell by SFr3.4 billion.
It also booked a SFr250 million write down on its bond portfolio.
The insurer said its only eight per cent of its portfolio was now in stocks, compared with 20 per cent at the beginning of January.
The last time Swiss Re cut its dividend was after the San Francisco earthquake of 1906.

End of insertion

Articles in this story

This article was automatically imported from our old content management system. If you see any display errors, please let us know: community-feedback@swissinfo.ch

In compliance with the JTI standards

In compliance with the JTI standards

More: SWI swissinfo.ch certified by the Journalism Trust Initiative

Contributions under this article have been turned off. You can find an overview of ongoing debates with our journalists here. Please join us!

If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.

Share this story

Change your password

Do you really want to delete your profile?