The scope of a reinsurer's activities has expanded In recent years. This is reflected, for example, in his greater familiarity with the basic business, a prerequisite of thor­ ough risk assessment. In this way his relations with direct insurers are enriched since the best possible forms of dealing with risks can be developed in common.
1986 was a successful year for the Swiss Re. On behalf of the Board of Directors I should like to express to all our staff our sincere thanks for their loyalty, their devotion and their achievement. At the same time I am pleased to note that, thanks to the diligence and technical abilities of its staff, Swiss Re is well equipped to face the future.
Foodstuffs Production of amino acids as basis for artificial nutrition, for additives to foodstuffs and animal fodder ifSI
In Fire reinsurance premium Income In Swiss francs was almost as high as In the previous year. Substantial pre­ mium increases - especially In the United States - and expanded business cancelled out the foreign exchange rate losses. - The result Is particularly gratifying: For the first time In years an underwriting profit was achieved, al­ though It should be taken Into account that In the year un­ der report natural catastrophes only occurred In coun­ tries with a relatively low Insurance density.
General Third Party Liability reinsurance even showed a pronounced Increase of premiums In Swiss francs. This growth Is due to Improved reinsurance conditions and also to premium Increases In the basic business. - The underwriting loss, which had already been high In previ­ ous years, rose further In the year under report despite years of Intensive efforts. This was caused by both com­ ponents of Incurred claims: On the one hand, the con­ tinued Increase of the frequency and average size of claims brought about higher claims payments; on the other hand, the claims reserves have once again been significantly strengthened. The Increased provisions for losses are necessary because the problem of late claims Is not only prevalent In the United States but Is also spreading - albeit In a different form - to Europe. The share of claims known at the end of an Insurance year measured In terms of the claims burden attributable to the relevant year (the so-called final loss burden). Is con­ stantly waning. The reinsurer has therefore to rely In­ creasingly on a careful estimate of losses Incurred but not reported (IBNR) and of the corresponding reserves. In so doing taking proper account of experience hitherto and the uncertainties Inherent In the problem.
The commissions and profit commissions accounted for gross business totalled Sw.frs. 1,053.3 million. Of this amount, Sw.frs. 186.2 million referred to retrocession­ aires, leaving Sw.frs. 867.1 million for own account.
The claims incurred comprise claims paid and the adjust­ ment in the outstanding claims reserve. In the year under report this figure for own account fell by Sw.frs. 48.1 million to Sw.frs. 2,313.8 million.
Gross premiums totalled Sw.frs. 420.2 million, Sw.frs. 14.4 million of which were for annuities purchased. After deduction of retrocession premiums of Sw.frs. 23.8 mil­ lion, the remaining net premiums amounted to Sw.frs. 396.4 million, corresponding to a rise of 0.3% over the previous year. Without the effect of foreign currency fluc­ tuations, net premiums would have risen by 10.3%.
At the end of the previous year they amounted to Sw. frs. 1,275.3 million which would rise to Sw. frs. 1,794.4 million as a result of the capital increase in 1986 and by the pro­ posed allocation of the profit, provided it is approved by the General Meeting of Shareholders. The capital funds would then be composed as follows: in millions of Swiss francs
The consolidated overall result rose by 23.4% to Sw. frs. 179 million (previous year, increase of 20.8% to Sw.frs. 145 million). In Non-Life insurance the trend, evident since 1985, towards improvement of underwriting results has become more pronounced. The underwriting loss fell in the year under report by Sw.frs. 124 million (25%) to Sw.frs. 369 million (previous year, decrease of Sw.frs. 35 million). The profit of Life insurance Increased by Sw.frs. 16 million to Sw.frs. 43 million after having fallen in the previous year. Overall the underwriting loss amounted to Sw.frs. 326 million (previous year, Sw. frs. 466 million). De­ spite the worldwide slide in interest rates and the consid­ erably lower conversion rates, the Income from capital In­ vestments grew by Sw. frs. 10 million to Sw. frs. 1,078 mil­ lion (previous year, increase of Sw.frs. 28 million). The slight reduction in the realized capital gains compared with the previous year, the higher write-offs and increased depreciation provisions led on balance to a clearly lower profit from financial operations In the amount of Sw.frs. 104 million (previous year, Sw.frs. 218 million). The man­ agement expenses rose insignificantly and taxes de­ clined slightly. The Group's capital funds shown (includ­ ing Group profit) amounted at the end of 1986 to Sw.frs. 2,104 million (previous year, Sw.frs. 1,605 million).
In Non-Life reinsurance the consolidated net premiums rose in local currencies by 7.9% (previous year, 20.5%). However, conversion into the stronger Swiss franc brought about a drop in premium of 7.0% to Sw. frs. 5,024 million (previous year. Increase of 5.2% to Sw.frs. 5,403 million). The underwriting loss declined considerably, namely by Sw.frs. 122 million to Sw.frs. 384 million, al­ though the reserves for late claims from Liability business have once more been substantially strengthened.
The Canadian Reassurance Company, Toronto, increased its conventional business in force by 12%. The published
The North American Specialty Insurance Company, Man­ chester, New Hampshire, is being redeveloped as a NonLife insurance company, in fhe year under report the com­ pany achieved a gross premium volume of US$ 4.6 mii­ iion and an overall result of US$ 0.03 miiiion (previous year, US$ 0.6 miiiion).
Holding and Other Companies mh Bausparkasse AG DM 60.1 12,100 673,285 -
Aviation insurance: Insurance of accident and liability risks, as well as ^ hull damage, in connection with the operation of aircraft.