Swiss Re Q2 Net up 45% to $1 Billion; Analysts’ Conference Call Today

Swiss Re released excellent financial figures for the second quarter of 2007, with earnings of CHF 1.2 billion ($1.007 billion), an increase of 45 percent over the same period last year. Annualized return on equity for the period improved to 15.9 percent, compared to 13.3 percent in 2006. Earnings per share rose 38 percent to CHF 3.50 ($2.94).

Premiums earned increased 17 percent to CHF 8.0 billion ($6.72 billion) for the quarter. The figure includes the integration of GE Insurance Solutions, which Swiss Re acquired last year. The bulletin noted that “shareholders’ equity decreased by 4 percent to CHF 29.5 billion [$24.77 billion] compared to the end of 2006, due to the mark-to-market effects of interest rate increases on bonds and dividend payments during the second quarter, as well as the buy-back of Swiss Re shares in the first quarter.”

“We are pleased with the results for the second quarter as we continued to generate economic profit growth through careful cycle management and efficient capital allocation, noted CEO Jacques Aigrain. “The results also demonstrate our continuing ability to deliver against our other goals of reducing earnings volatility, enlarging market scope and achieving organizational excellence.”

Total investment results were CHF 2.3 billion ($1.93 billion), a 57 percent increase over the same quarter in 2006. Investments benefited from “Insurance Solutions and GE UK Life acquisitions and Admin Re® transactions,” said the bulletin. “The annualized return on investments was 5.6 percent, up from 4.8 percent in the second quarter of 2006.”

Swiss Re said its P/C “business delivered operating income of CHF 1.7 billion [$1.427 billion], up 68 percent over the second quarter of 2006 due to excellent underwriting results, the inclusion of Insurance Solutions and strong investment performance. Premiums earned for traditional business grew to CHF 4.5 billion [$3.78 billion], up 19 percent over the same period in the prior year.” The P/C combined ratio for the quarter improved to 90.7 percent from 93.9 percent in 2006.

Aigrain indicated that “assuming an average level of natural catastrophes, the outlook for the rest of the year remains strong.” The earnings report stressed that “Swiss Re continues to manage the cycle actively by adjusting capacity to ensure adequate pricing, thus preserving the superior quality of future earnings. The Group continues to develop new products to meet the rising demand for natural catastrophe protection and for its engineering, weather, agricultural and marine businesses.”

Swiss Re also said it ” sees further attractive opportunities to deploy capital in Admin Re® and in the longevity business. The Group continues to develop the market for insurance derivatives as evidenced by the recent launch of catastrophe bond performance indices in cooperation with Standard & Poor’s.”

Swiss Re will hold an analysts’ conference call this afternoon, August 7, at 14.00 (CET). You are kindly requested to dial in 10 minutes prior to the start using the following numbers:
From Europe (excluding UK) +41 91 610 5605
From UK +44 20 7107 0613
From US (toll-free).

The full report, including presentations and additional comments is available on the group’s web site at: www.swissre.com.

Source: Swiss Re