Credit and Surety A. Sulzer H. Voser Members of Senior Management P. Höppler, J. Leis
In insurance business the three insurance groups, Ver­ einte/Magdeburger in Germany, Lloyd Adriatico in Italy and ELVIA in Switzerland all improved their results. Claims reserves were also strengthened, in some cases consid­ erably.
A successful economy Is unthinkable without energy and communications.The pictures on these pages, taken from fifteen countries representing each continent, remind us just how important these two requisites are if any level of prosperity is to be achieved. The main photograph from the first set, showing Brazil’s national tree Ipé and an elec­ tricity pylon, gets to the heart of the energy debate of the 1980s: nature and technology - consensus or conflict? Whether peace in the energy domain has actually been achieved or merely proclaimed remains an open ques­ tion. Certainly, the debates on nuclear energy, fossil fuels and renewable energy sources have relaxed, and the ideological war between ecology and economy has come up with the concept of sustained development.The second set of photographs captures the dominating theme of the present decade, i. e. the final integration of our planet into a global village through progress in information and com­ munication technology and the growing force of trade cur­ rents. The scenes depicting the caravan and the bazaar are by no means out of place. The caravan symbolizes cross-border, long-distance trade; it is the driving force behind the development of civilization and dates back to the earliest advanced cultures along the Indus, in Meso­ potamia and along the Nile. The bazaar epitomizes the domestic market; it opposes the worldwide trend, putting a damper on the globalizing euphoria. International trade and intercontinental transport must recognize their eco­ logical responsibilities if they are to contribute to sus­ tained development.
At the Canadian Reassurance Company, Toronto, the Life reinsurance business in force increased by 16.1% to CAD 32,300 million. This increase is largely attributable to the acquisition of a major portfolio. Investment income rose. Acquisition costs incurred by the mentioned portfolio takeover reduced the published profit to CAD 7.1 million (previous year, CAD 15.2 million). The dividend paid was unchanged at CAD 0.8 million.
The Australian Reinsurance Company Limited, Mel­ bourne, showed in Non-Life reinsurance gross premiums of AUD 208.4 million, an increase of 40.3% as against the previous year. The increase stemmed mainly from
The Magdeburger Versicherungsgruppe, Hanover, achieved in the year under report consolidated gross premiums of DEM 900.8 million. In the previous year, the volume including the Magdeburger Lebensversicherung AG, was DEM 1,191.8 million. The latter company merged with the Vereinte Lebensversicherung AG with effect from 1 January1993.-The gross premiums of the Magdeburger Versicherung AG rose by 4.5% to DEM 839.5 million. Underwriting business produced a profit of DEM 4.1 million (previous year, loss of DEM 17.0 million); the improvement is mainly due to the liquidation of equalization reserves. The loss burden in Motor collision damage insurance remained very high, while a slight reduction was achieved in costs. The result of the non-technical account was in keeping with the previous year. Overall, the social costs incurred by the merger in the amount of around DEM 40 million were financed in full from the year’s current income
We have audited the consolidated financial statements of Swiss Reinsurance Company presented by the Board of Directors for the year ended 31 December 1993. Our audit was conducted in accordance with accepted auditing standards promulgated by the profession. We confirm that we comply with the legal requirements concerning pro­ fessional qualification and independence.
** The figures in this column do not always amount to the total of the figures in the two preceding columns as figures for holdings and other com­ panies are also included.
SwissRe Holding Limited, Zurich, merged with Swiss Re, Zurich, with effect from 31 December 1993. In addition, Magdeburger Lebensversicherung AG, Hanover, merged with Vereinte Lebensversicherung AG, Munich, with retroactive effect from 1 January 1993.
The consolidation reserve fund results from the difference between the capital funds shown of Group companies and the corresponding book values applied by Swiss Re, Zurich. In the year under report the consolidation reserve fund rose by CHF 23 million to CHF 664 million (previous year, rise of CHF 295 million).
The capital funds shown in the consolidated balance sheet (sum of share capital, reserves shown, consolida­ tion reserve fund and group profit) correspond to the book value of the funds invested in the entire Group by share­ holders of Swiss Re, Zurich. In the year under report Group capital funds rose by CHF 912 million to CHF4.857 million. The negative effect from the conversion of foreign cur­ rencies amounted to CHF 61 million (previous year, CHF 22 million).
The premium income in Credit and Surety reinsurance fell by just on 5%. The main reasons for this drop are the ongoing pruning of commitments and the economy- related distinctly lower turnover in European credit insur­ ance. - The underwriting result again worsened despite the positive experience in the overseas markets. Losses were incurred in the key markets of Germany, Spain and Italy; moreover, continued negative run-offs were record­ ed from product segments that have meanwhile been dropped.
The interest rate decline expected in most investment countries and a still partly attractive return outlook en­ couraged most of the new investments to be made once again in medium to long-term bonds. The balance-sheet value of all fixed-interest investments (bonds, loans and convertible securities) increased by CHF 2,191 million to CHF 8,447 million.The average life of the portfolio at year- end was marginally longer than in the previous year. The balance-sheet value of shares recorded a slightly over­ proportional advance over the previous year namely by CHF 468 million to CHF1.489 million as a result of selec­ tive buying of securities in various markets.The real estate portfolio declined by CHF 14 million to CHF 1,265 million; this resulted primarily from various sales.
Balance Sheet Assets Cash in hand, postal bank account, bank balances Current-account balances Cash deposits
United Kingdom Palatine Insurance Company Limited 71-77 Leadenhall Street London EC3A 2PQ
Capacity: The maximum amount of a -*■ risk that can be accepted in (re)insurance.
Co-insurance: Where a number of -> insurers and/or -> reinsurers each share part of a -> risk.
- Credit insurance: Insurance against financial losses sustained through the failure for commercial reasons of policyholders’ customers to pay for goods or services supplied to them.