The technical result in the non-life business improved substantially by 27%, climbing to CHF 912 million. Although the combined ratio increased slightly (from 109% to 110%), this is more than compensated for by the technical investment result. The change in the combined ratio is caused by different factors: the claims ratio rose slightly from 77% to 79%, more as a result of changes in the portfolio structure (increase in accident and health business over other lines) than an increase in loss frequency. The expense ratio declined modestly from 32% to 31%, with the focus shifting slightly as a result of the new mix of products and lines stemming from the extended
Other income and charges resulted in a fall in net outgo from CHF 251 million to CHF 227 million. Opposing developments in several items contributed to this result. Compared to the previous year, a provision of CHF 100 million for reorganisation expenses set up in 1996 is no longer included. However, interest charges have risen noticeably to CHF 192 million. A provision of CHF 50 million has been set up to cover internal costs related to the “year-2000” issue.
The problem of electromagnetic fields represents a greater potential danger to the insurance industry than suspected. This is due less to the incalculably small health risk and more to the incalculably large social risk of change.
Results improved in the traditional credit and surety business, where we were able to consolidate our leading global position. Non-traditional forms of cover continued to gain in importance.
Investments at balance sheet values were CHF 70.1 billion at the end of 1997 (1996: CHF 58.5 billion). The growth of CHF 11.6 billion, approximately 20%, is mainly due to the considerable increase in the value of the share portfolio, the acquisition of Swiss Re Italia and cash flow from reinsurance operations.
Shares and units in investment funds are valued at market value. Unquoted shares are valued at an estimated prudent market value. Realised gains and losses on sales as well as valuation adjustments included in the profit and loss account are based on cost. Realised gains and losses on sales of shares in Swiss Re, Zurich, which are carried out within a particular period because of the requirements of Swiss law, are not included in the profit and loss account insofar as the shares are replaced within a short period at comparable prices.
The majority shareholding in Société Anonyme Française de Réassurances (SAFR) was sold to Partner Reinsurance Company, Hamilton, Bermuda, and no longer forms part of the Group. As part of the transaction, the shareholding in Partner Reinsurance Company was increased to 21%. This exchange of securities is not contained in the profit and loss account. Partner Reinsurance Company is included in the accounts with its share of profits and equity.
The amount in the respective balance sheet positions related to unconsolidated subsidiaries is as follows: CHF millions 1997 1996
Change in technical provisions in accordance with the ordinary profit and loss account 2 269 2 132
As auditors of the group, we have audited the consolidated financial statements on pages 28 to 46 of the Swiss Re Group for the year ended
1. Share capital 2. Legal reserve 3. Reserve for own shares 4. Other reserves 5. Disposable profit
Provisions for claims outstanding are based on information provided by clients and own estimates of expected claims experience which are drawn from empirical statistics. These include provisions for claims incurred but not reported. Unpaid insurance obligations are set aside at the full expected amount of future payment.
Swiss Re Life & Health d 100 – – – – Tverskaya Street 16/2 Building 3, 4th Floor 103009 Moscow
Swiss Re Brasil Serviços e d 100 – – – – Participações Ltda.
Swiss Reinsurance Company d 100 – – – – Representative Office Tokyo Otemachi First Square 9F 5-1 Otemachi 1-chome Chiyoda–ku, Tokyo 100
This problem could cost the economy dearly; the conversion costs are estimated at up to USD 600 billion worldwide.
In the traditional reinsurance business, Swiss Re does not have any direct links with insurance policyholders. It is primarily the responsibility of the insurers to point out possible problem areas to their clients and to exercise restraint in engaging new business. However, we are directly affected by the action or lack of it from our clients. We therefore cannot allow things to follow their own course, and we are indeed taking action, for instance through publications which aim to sensitise the reader to the problem. In addition, we have urged our clients to review their policies thoroughly for possible “bug” risks.
Swiss Re has released two publications on the year-2000 problem: The brochure “The Millennium Bug: Analysis of Exposure” and the flyer “Computer problems 2000. The millennium muddle”.
But, apart from a communications centre, Rüschlikon is intended also as a place of learning: People will come here to write and think, amongst other things about the risks of this world. This is where the company may step beyond the confines of the bare business world into an area that concerns each and every one of us,
More information on our full range of publications can be found in “Swiss Re Publishing –
Over the last few decades, the composition of industrial products has become noticeably more complex. This poses potential hazards for consumers. Potential hazards can range from a steam iron with a faulty boiler to a faulty differential gear in a car. Economically advanced countries were therefore quick to introduce laws on product liability.
Preferred risks in life insurance A mortality study for the yearsA mortality study for the years 11958958––11994994
General third party liability insurance: Insurance of industrial, commercial, employers’, product, professional or private liability to third parties.
SwissRe Finance (Bermuda) Ltd., a wholly owned subsidiary of Swiss Re, Zurich, placed a convertible bond issue on 29 June 1995. The convertible bonds, in the nominal amount of USD 500 million and maturing in five years (on 30 June 2000), can be converted into a total of 490 330 registered shares of Swiss Re, Zurich. In order to secure conversion rights, no new securities were issued.