The concentration process is taking place against a backdrop o f globalisation and deregulation o f the insurance business. This requires 2 Swiss Re Group
Walter B. Kielholz took over as Chief Executive Officer on 1 January 1997. He is supported in his function as head of the Swiss Re New Markets division (currently Alternative Risk Transfer Markets, ART) by Erwin K. Zimmermann. The Board of Directors appointed Mr Zimmermann to the Executive Board with effect from 1 January 1997.
Stefan Lippe Pierre L. Ozendo Christoph Dorschel* Christian R. Speiser* Peter P. Hügle Bruno Laube5
— Capitalfunds in relation to net premiums remain nearly unchanged at 74 % (1995: 75% ). H ad there been no offset o f goodwill from the acquisition of Mercantile & General Re, the ratio would have risen to 90% . T he return on equity (profit after tax in relation to average capital funds employed during the financial year), improved from 12.7% to 13.8%. This value is stated on a comparable basis with the previous year, before the offset o f goodwill from acquisitions against capital funds.
The financial markets have developed very well since the beginning o f the year. The acquisition o f Mercantile & General Re and Unione Italiana di Riassicurazione, together with the increase o f our holding in PartnerRe, Ber­ muda, will expand the scope o f consolidation in the current year.
Another global decline in loss events from natural catastrophes particularly benefited the results o f reinsurers, making it possible to significantly increase provisions for future events. The wave o f mergers and acquisitions among professional reinsurers reached a new high point. And the capital markets witnessed the launch of the first products based on the securitisation o f insur­ ance risks.
C hina/H ong Kong/Taiwan China’s insurance industry is evolving rapidly, creating a steadily growing need for reinsurance. We support the mostly young companies in their development through the targeted build-up o f a network o f contacts, thanks to strong local presence, and by offering a comprehensive range o f services and training.
In Taiwan, our efforts to improve results were foiled again by a large claim o f C H F 32 million, caused this time by a fire in a semiconductor factory. In view of our well established market position, we should be in a privileged posi­ tion to exploit new business opportunities.
N o r t h and S ou t h A m e r i c a
Africa Both the num ber and the severity o f fire losses caused the worst result in the South African market for many years, especially for reinsurers. This uneven loss distribution as well as continuing com petition in the reinsurance market are unlikely to improve the situation in the near future.
The Swiss Insurance Training Centre in Zurich, founded by the Swiss Re Group in 1963, expanded its training activities once more in 1996.180 par­ ticipants took part in the 1996 series o f courses, held in English and Spanish, bringing the total num ber o f participants to nearly 2500 since the centre opened its doors. For the first time a course was held abroad - in Seoul.
P rofit fo r the financia l year 1459 1 101 31 Swiss Re Group
P rovis ions fo r unearned p re m ium s 732 521 354 76 528 2211 2211
Investm ents fo r un it-lin ked life re insurance po lic ies w here p o licyh o ld e rs bear the inves tm en t risk 260
Investm ents fo r un it- lin ke d life re insurance po lic ies w here p o licyh o ld e rs bear the in ves tm en t risk
Capital fun ds on 31 D ecem ber (p rev ious year) 9 130 8019
Capital fun ds on 31 Decem ber in c lud ing unrea lised gains, before a lloca tion o f p ro fit 12 348 10 973 in %
v io us years w ere in to ta l adequate w hen reassessed fo r the cu rre n t year. There was no s ig n ifica n t p ro fit o r loss fro m c la im s deve lopm ent.
O wn shares held on 31 Decem ber 1996 at cost 1 028 104 1 033
O wn shares held on 31 Decem ber 1995 at cost 791 971 708
As secu rity fo r ow n o b lig a tion s , assets to ta llin g CHF 2.396 b illio n (1995: CHF 2.953 b il­
lion ) have been e ith e r deposited , p ledged o r assigned in fa v o u r o f ceding com panies.
US asbestos and en v iro n m e n ta l lia b ility .T he se o b lig a tio n s com p rise reported c la im s as w e ll as c la im s incurred bu t no t ye t reported , and g e ne ra lly arise ou t o f po lic ies da ting back ten years o r m ore. The fo llo w in g tab le show s the paym en ts m ade by the
Sw iss Re G roup as w e ll as the estim a ted , no n-d iscou n ted o b lig a tio n s fo r ow n account as a resu lt o f these cla im s: C la im s p a id : USD m illions excluding M & G Re including M & G Re*
S hareho lders ' cap ita l and reserves stated in the balance sheet
O pera ting ra tio no n -life 98 97 94 94
Asia Pacific Hermann Hefti S ig isbert A lb in , Jürg Bleuler, Felix W. Bossert, Gion Duri Cantieni, M anfred Freylinger, Franz-Josef Hahn, Rudolf O schw ald,Tom ih iro Segawa
Human Resources Carol Franklin Engler Josef Elmiger, Peter Eugster, W alter Frei, Fritz G utbrodt, Rudolf Oberle
A d m in is tra tive expenses - 477 - 397
D ividend and in te rest fro m subs id ia ries and a ffilia te d com pan ies 293 219
The fo llo w in g item s are stated at nom ina l va lue in the balance sheet, a fte r deduction o f know n de lcredere risks if applicab le: - Loans to subsidiaries and affiliated com panies - Loans - M ortgages - Time deposits - Deposits w ith ceding com panies - Debtors - Cash at bank and in hand 59 Swiss Re, Zurich
D iv idend paid fo r the pre v iou s year - 329 - 211
Investm ents in subs id ia ries and a ffilia te d com pan ies
As statutory auditors, we have audited the accounting records and the financial statements o f Swiss Reinsurance Com pany on pages 56 to 63 for the year ended 31 December 1996.
D iv idend paid per reg is te red share CHF 48 10.50 15 22.50 30
On 2 D ecem ber 1993 and on 1 D ecem ber 1995 respective ly, the bearer pa rtic ip a tio n certifica te s and the bearer shares w ere converted in to reg is tered shares.
Ham ilton HM 12 to — .C w V) <D -o £ 0) 0> .c tn v> QJ
M elbourne, Vic. 3000 w ith branch offices in Sydney, and in Auckland and W ellington,
A phantom risk which is impossible to quantify but nevertheless real. Order number: 96-77 Product l iability cl in Europe
How safety standards in the aviation industry can be guaranteed, both now and into the next century. Order number: 96-81 76 Swiss Re Group
New Swiss Re publications can be dow n­ loaded from the Website. Publications may also be ordered by e-mail from the fo llow ing address: publications@swissre.com 7 7 Swiss Re Group mailto:publications@swissre.com
A llo ca ted in ve s tm e n t re turn
C oncen tra tion o f risks w h ich m ay be affected by the sam e c la im event o r con cen tra ­
Life o r endow m ent insurance: life insurance in w h ich the bene fits take the fo rm o f a con tra c tu a lly de te rm ine d am o un t payab le upon death o r on su rv iva l to a specified age.
Non-proportional reinsurance: Form o f re insurance in w h ich the re insure r assumes th a t part o f the insure r's c la im s tha t exceed a certa in am o un t aga inst paym en t o f a spec ia lly ca lcu la ted p rem ium .