Swiss Re predicts billion dollar losses

Swiss Re predicts billion dollar losses

Zurich: The world’s largest reinsurance group, Swiss Re, predicted Monday losses of 1.2 billion Swiss francs ($1.07 billion, €732 million) due to the US subprime mortgage crisis.

“Following completion of its October performance reporting, Swiss Re has to report a CHF 1.2 billion mark-to-market loss, or CHF 981 million after tax," a statement from the Zurich-based company said.

Swiss Re said its sub-prime securities had been written down to 62% of their starting value.

“The excellent performance of the Group throughout the year to date means that Swiss Re is able to absorb the extraordinary financial market developments in October," said CEO Jacques Aigrain.

“Despite this, it is clear that further improvement and reinforcement of our financial risk taking process is appropriate and we have taken immediate action to make the necessary changes," he said in a statement.

Swiss Re, said at the start of the month it had weathered turbulent financial markets as it reported a 5.0% drop in third quarter net profit due to lower investment earnings.

The company’s quarterly net profit came in at 1.469 billion Swiss francs compared with 1.550 billion Swiss francs for the third quarter of 2006.