In view of the growing demands on reinsurers for professionalism, global presence and financial resources, various small and medium-sized reinsurance companies have been acquired recently by large reinsurers. In assessing such projects, we focus on the ability of the acquisition to com­ plement our business as well as on the cost/benefit relationship of the investment compared to the alternative of expanding our activities through internal growth. In 1995 we acquired the Netherlands-based Alhermij Group, which substantially strengthened our position in life and health reinsurance.
27 February Swiss Re's new representative office in Beijing becomes operative.
Otber expenses and income resulted in higher net outgo. This is mainly attributable to negative exchange rate effects, higher interest charges and provisions following our capital market issues in mid-1995. The sale of our insurance operations in 1994/95 resulted in an additional and final extra­ ordinary capital gain of CHF 514 million. This is offset by a special increase of CHF 500 million in the provision for late claims. There remains an extra­ ordinary profit of CHF 11 million after tax.
— Plans for 1997: In order to further expand our position in Asia, we plan to open representative offices in Mumbai (Bombay) and in Shanghai.
In accident/liability insurance, policy limits were successfully introduced for employers' liability. In property insurance, the main challenge was to maintain a sufficient price level for catastrophe risks in view of tough competition.
Significant restructuring is currently taking place in the insurance industry. On the one hand, mergers between mostly larger insurers are resulting in some consolidation. And on the other hand, small and medium-sized companies are exhibiting above-average growth. These are often focused on selected regions, products or distribution channels. While the initial effect of consolida­ tion usually is to increase retentions and so retain more risk, it is often followed by a period of expansion into new markets and products. Also here, the teinsurer proves to be a valuable partner. For small and medium-sized insurance com­ panies, the reinsurer is a reliable business partner in order to control risks and ensure the efficient utilisation of risk capital.
In the field of special and financial business with insurance companies, the main emphasis remains on financial reinsurance. Reinsurance treaties of this type focus on protecting balance-sheet or financial risks. We observe steady growth in this field in the demands placed on reinsurers for professionalism and specialised knowledge. We are responding to this trend by pushing forward with the targeted expansion of personnel at Swiss Re Atrium in Zurich and New York, the units which specialise in this area. Swiss Re Atrium increased its profit contribution substantially in 1995.
The technical result for life business fell to CHE 151 million compared with CHE 188 million in 1994.The inclusion of Alhermij for the first time was more than offset by the combined effects of reserve adjustments, claims fluctua­ tion and an increased level of new business financing.
Swiss Re employed a staff of 6782 worldwide on 31 December 1995. 4173 em­ ployees worked for the reinsurance companies, 2609 for the service and other companies.
1995 1994 CHF millions Totai % % Total % % Gross premiums by country Europe 59^9 59.0
Land and buildings 122 15 2 9 148 Investments in unconsolidated subsidiaries and affiliated companies 39 23 29 2 70 3 166 Loans to unconsolidated subsidiaries and affiliated companies 4 4 Shares 41 48 11 17 21 50 188 Fixed income securities and registered debt instruments 114 259 151 95 481 421 1521 Loans 2 5 4 11 Mortgages 14 1 8 23 Time deposits 22 10 1 11 12 18 74 Other investments 1 7 12 1 5 26 Deposits with ceding companies 19 24 24 3 20 59 149
As securityforown obligations,assets totalling CHF 2.953 billion (1994: CHF 2.961 bil­ lion) have been either deposited, pledged or assigned in favour of ceding companies.
The provisions forclaims outstanding include provisions of CHF 1.788 billion (1994: CHF 1.388 billion) prescribed by local regulatory authorities forfuture claim fluctuations and for large and catastrophic losses. In 1995 CHF 418 million were added to provisions following revaluation at current exchange rates.
Profit on extraordinary actlvltes before tax - 348 14 Tax on extraordinary activities - - 121 3 Extraordinary profit after tax — 227 11
V Creditors 1. Creditors arising out of reinsurance operations 2. Amounts owed to banks 3. Other creditors
high CHF 462 494 763 811 1345 1 356 low CHF 313 370 464 515 720 1 170 year-end® CHF 370 480 735 789 1 342 1 355
International Risk Management Group Ltd.^ 69 Pitts Bay Road Hamilton HMCX with 27subsidiaries, affiliated companies, and branch offices in 11 countries
Swiss Re Life Company America 237 Park Avenue NewYork, NY1GG17 75 Swiss Re Group
The premiums attributable to the financial year, including unearned premiums of the previous year and minus unearned premiums for the following years.
Fire insurance: Insurance against fire, lightning, explosion or damage caused by falling aircraft; it can also embrace insurance against windstorm, earthquake, flood, other natural hazards or political risks.
Net income from investments, ie investment income, valuation readjustments, realised gains and losses, less management charges, in relation to average invest­ ment holdings.