Swiss Re reports “restored” capital position in 2009

Swiss Re reports its capital position is now fully restored, announcing a 2009 net income of CHF 506 million (Cdn$489 million).
That represents a far cry compared to Swiss Re’s loss of CHF 864 million (Cdn$835 million) in 2008.
“Today, I am proud to say we have come a long way,” Swiss Re CEO Stefan Lippe said in a press release. “First, we have fully restored our capital position.
“Second, we have significantly de-risked and strengthened our balance sheet.
“And third, we have maintained the strong earnings power of our core business through underwriting profitability and cost discipline throughout the group.”
Swiss Re said its 2009 profit was affected by impairments of CHF 2 billion (Cdn$1.9 billion), mainly in the securitized products portfolio, and by mark-to-market losses of CHF 1.9 billion (Cdn$1.8 billion) on corporate bond hedges.
For the full year, return on equity (ROE) increased to 2.3%, compared to a negative 3.4% ROE in 2008.
The reinsurer said its property and casualty segment “continued to deliver excellent results.” Operating income increased 39% to CHF 3.8 billion (Cdn$3.7 billion) in 2009 from CHF 2.7 billion (Cdn$2.6 billion) in 2008.
“As a result of careful underwriting and lower levels of natural catastrophe losses, the combined ratio improved to 88.3% (or 86.5% excluding unwind of discount) for the full year, compared to 97.9% (96.1%) in 2008,” Swiss Re reported.