Canadian Underwriter

Swiss Re ups WTC loss estimate and predicts loss for 2001

February 27, 2002   by Canadian Underwriter

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Swiss Re, the world’s second-largest reinsurer has increased its after-tax loss estimate from the September 11 terrorist attacks to US$1.73 billion from US$1.25 billion. This and other exposures have left the company predicting a loss of more than US$117 million.
Other loss events adding to the difficult year include Tropical Storm Allison and the Enron collapse. As well, deterioration of investment earnings were a factor in 2001’s results.
The increased September 11 loss estimate is the result of a 9.9% increase in gross loss estimates, reductions in recovery assumptions and foreign exchange rate fluctuations, the company says. Reserves of about US$600 million have been set aside in 2001 to absorb September 11 losses.
The company is optimistic, however, given rate increases seen in the current renewal season. Overall increases topped 15%, with treaty renewals at about 11% and facultative renewals an impressive 35%.
Despite the loss prediction, the company is standing by its dividend of US$1.47 per share.

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