Le m ck e a t w w w .s w is sr e
Earnings per share in CHF 171 208 22 Dividend per share in CHF 50 50*
Business report Financial year 2000 7 Non-Life Business Group 10 Life & Health Business Group 15 Financial Services Business Group 18 Corporate Centre 23 Income reconciliation 25 Capital management 26 Group risk management 28 Recent events and outlook 30
Annual report Swiss Reinsurance Company Income statement 89 Balance sheet 90 Notes 92 Proposal for allocation of profit 98 Report of the statutory auditors 99
In 2000, the three business groups showed varying development: after several years of fierce competitive pressure, the non-life business benefited from signs of recovery. Premium income was up 29%, from CHF 8 916 million in 1999 to CHF 11 530 million in 2000. Operating income rose by no less than 43% to CHF 2 164 million (1999: CHF 1 513 million). The European winter storms Lothar and Martin – which had a substantial impact on results in 1999 and also left their mark on the figures for 2000 – were a key factor prompting firmer pricing in non-life reinsurance. This process is still very much under way, and we confidently expect to see further sharp improvements in the performance of the non-life business.
The financial services business comprises a selected range of activities. Results for 2000 were marked by an above-average number of major loss events for large industrial risks and weather contracts and the absence of a significant gain realised on the sale of our 20% interest in Credit Suisse Financial
Swiss Re’s Corporate Centre essentially manages the Group’s most important shared resources and functions: finances, risk, human resources, information technology, brand and reputation.
We are convinced that all three sectors of the business are extremely well positioned in the global marketplace. They hold a leading position in their respective markets, and they are leaner and fitter than just a few years ago. They have demonstrated their powers of innovation, can offer our clients a comprehensive range of products and they are underpinned by a strong financial base. In the future, Swiss
Re will go on to even greater recognition as one of the world’s leading successful financial services groups.
Max E. Eisenring, our Honorary Chairman, passed away on 21 January 2001, shortly after his 91st birthday. Mr Eisenring joined Swiss Re in 1944 as an actuary in the Life Department. In 1958 he was appointed a member of the Executive Board. From 1964 to 1979 he was Chairman of the Board of Directors. In recognition of his outstanding achievements, he was appointed Honorary Chairman at the Annual General Meeting of Shareholders in 1979. Mr Eisenring’s contribution and encouragement helped Swiss Re grow into a truly international enterprise. His ability to communicate, his humanity and openness to new developments were exemplary.
Corporate Centre divisions Risk & Knowledge Finance Communications & Information Human Resources Technology
Business divisions Europe Swiss Re Life & Health Swiss Re Investors Michel M. Liès John R. Coomber Giuseppe Benelli
Swiss Re’s record of outstanding earnings growth continued in 2000 with an increase in earnings per share of 22%. The Non-Life Business Group delivered significant improvements in underwriting performance despite having to absorb loss developments from prior years and a larger than usual contribution to equalisation reserves. The Life & Health Business Group continued to perform strongly and the Financial Services Business Group further developed its capabilities while delivering exceptional returns on the Group’s investments. Swiss Re is now poised to emerge from this period of soft pricing with its balance sheet strength intact, well placed to take advantage of the opportunities that lie ahead.
The combined ratio in the Non-Life Business Group improved from 122% to 117%, primarily due to an absence of natural catastrophes on the scale of those seen in 1999. In the Life & Health Business Group, continuing good operating profitability was mainly driven by strong returns from Swiss Re’s Admin Re business.
Amortisation of goodwill increased from CHF 211 million in 1999 to CHF 310 million in 2000, mainly related to the acquisition of Underwriters Re. Several other smaller acquisitions – such as of Washington International Insurance Company and Società Italiana Cauzioni – also contributed to the increase. Amortisation of all intangible assets arising from acquisitions increased from CHF 453 million in 1999 to CHF 580 million in 2000. This includes the amortisation of goodwill and the effects of amortising the acquired present value of future profits from life and health acquisitions including Admin Re transactions. This latter component is included in the results for the Life & Health Business Group.
The sea is probably one of the most unpredictable forces of nature, a quality which has characterised all the activities associated with it, such as fishing, sport, trade – as well as reinsurance. While developing an online rating tool for yacht business, my major challenge was to identify the constants that govern the unpredictability of maritime activities. In order to do so, you need not only passion and logic, technical know-how, experience and perseverance, but also intuition. Creating an electronic tool for the webbased reinsurance of yachts was previously considered almost impossible. It is great to lead the team that has managed to cope with that challenge.
Earnings per share in CHF 171 208 Return on equity in % 10.9 11.9 8 Swiss Re Annual Report 2000
Other operating expenses increased from CHF 2.8 billion to CHF 3.1 billion, mainly due to the acquisition of Underwriters Re, as well as continued investment in information technology and e-business to achieve Swiss Re’s efficiency targets. The Group also incurred restructuring charges of CHF 110 million in 2000; this relates to various initiatives being undertaken by the Non-Life Business Group to improve operating efficiency – most notably the merger of the former divisions Bavarian Re and Europe which was announced in early 2001.
Shareholders’ equity decreased from CHF 24.8 billion to CHF 22.8 billion. This ref lects a reduction in unrealised gains on equity securities, due to movements in world stock markets in 2000. The effect of net income in 2000 was partly offset by payments made to shareholders in the form of dividends and share repurchases.
The US broker reinsurance company Underwriters Reinsurance Group, Inc., of Calabasas, California, was acquired and consolidated as of 10 May 2000. Renamed Swiss Re Underwriters Agency Inc., it has been operating as a separate underwriting entity since 1 January 2001.
On 1 January 2000, Swiss Re completed the acquisition of Washington International Insurance Company. It has been included as from this date in the Group financial statements.
The results of all of these deals have been included from the date of the transactions.
Swiss Re’s non-life premiums grew strongly in 2000, particularly in European property and motor business – as well as through the acquisition of Underwriters Re. The combined ratio improved significantly, mainly due to the low number of natural catastrophes in 2000; this was partially offset, however, by the adverse development of prior treaty years – including the 1999 European winter storms. At the January 2001 renewal, Swiss Re secured significant improvements in reinsurance rates, terms and conditions in many markets.
The positive trend was less pronounced in Europe, although price increases in selected markets and lines of business at least kept pace with claims inf lation. Late loss reporting from the winter storms Lothar and Martin put additional strain on profitability, keeping the underwriting result comparable to the previous year’s level; there are, however, good prospects for improvement in the coming years.
Premium income in Japan stagnated in 2000, ref lecting the continuing difficult economic situation. Contrary to European and US experience, the Japanese insurance industry was affected by natural disasters which weighed heavily on overall performance.
In 2000, the non-life reinsurance markets saw a clear, though still small, reversal of pricing trends. After years of downward pressure, global prices stabilised in 1999 and then picked up during 2000. In retrospect, this is a further confirmation that the breakdown of the retrocession market in London at the end of 1999 was a definite turning point from a soft market into a general rate hardening.
■ USD 40.3 ■ EUR 28.8 ■ GBP 11.2 ■ JPY 2.2 ■ AUD 2.3 ■ CAD 2.2 ■ CHF 1.3 ■ other 11.7 11 Swiss Re Annual Report 2000
Claims ratio in % 90 88 Expense ratio in % 32 29 Combined ratio in % 122 117
Swiss Re’s technical reserve ratio in the Non-Life Business Group decreased from 399% to 337%, driven mainly by the strong growth in premiums earned in 2000 and the impact of foreign exchange movements.
Property Despite the termination of certain under-performing contracts, property business achieved a robust earned-premium growth of 34% over 1999. The acquisition of Underwriters Re accounted for one-third of that growth, but it also benefited from increased rates and new sources of business in Europe and North America. Moreover, premium income for the underwriting year 1999 had been underestimated and was therefore revised upwards. Substantial price improvements following the winter storms which hit Western Europe in the last days of 1999 will only show their effect in 2001, since most reinsurance contracts had already been concluded for 2000 at the date the events occurred.
dence of natural catastrophes. Although these are only first steps towards satisfactory profitability in this line of business, the signs are promising that a positive trend will continue in the years to come. Results were affected negatively by some significant losses from man-made events, such as the explosion of an oil refinery in Kuwait, a chemical plant in Texas, a coal mine in Utah (USA) and a fireworks factory in the Netherlands. Natural events such as storms and earthquakes produced a much lower loss burden for the insurance industry in 2000 than in 1999: USD 7.6 billion as against USD 24.4 billion. According to experts, though, this single year experience does not change the trend towards greater frequency and severity of losses from natural catastrophes in the world.
Swiss Re’s prudent acceptance policy kept its liability result at a very satisfactory level, despite the adverse development of prior underwriting years – mainly in product liability – and some large losses, such as the Kaprun tunnel fire in Austria. Swiss Re has also benefited from its conservative reserve-setting in asbestos and environmental exposures, which resulted in a positive contribution from some successful commutations agreed in 2000.
Accident Premiums earned 511 889 Combined ratio in % 95 115
Other lines The 34% rise in earned premiums is mainly attributable to marine business and that portion of credit and surety programmes underwritten in the Non-Life Business Group. Marine premium volume increased worldwide, with the strongest growth recorded in the US – in part through the consolidation of the Underwriters Re portfolio. Engineering saw modest premium growth due to Swiss Re’s restrained underwriting approach; terms and conditions in this business segment have still not reached a satisfactory level.
Strict underwriting discipline and focused deployment of capacity have already brought a significant improvement in Swiss Re’s book of business during the January 2001 renewal negotiations. Swiss Re is determined to continue these efforts, giving particular attention to consistent and thorough assessment of exposures and allocated capital in relation to potential returns.
Swiss Re continues with initiatives to optimise internal business processes and achieve strategic cost leadership. New, specific e-business applications, currently in the implementation phase, are key drivers in transforming Swiss Re’s middle and back office operations into an efficient and lean business-support unit. The first results of these changes are already visible.
In several European countries, market developments centre around social security reforms, mainly in relation to pensions. The impact on life reinsurance requirements has so far been minor. The UK market in 2000 was strongly inf luenced by capital and cost pressures which have prompted consolidation and demutualisations. The strains on capital resources have simultaneously heightened interest in reinsurance as a capital management tool.
Health business continues to offer unfulfilled potential in a number of markets worldwide. While a global trend towards privatising health and welfare provision means there is a growing recognition of the protection provided by health policies, it has proved difficult in some countries to develop products which both meet policyholder needs and provide a reasonable return for insurers. Some existing health products have made losses because of unrealistic policy benefits, lax policy conditions or insufficient underwriting enquiries. Such business is not only detrimental to the interests of primary companies and reinsurers, but also ultimately disadvantageous to the consumer.
Cost and capital pressure on primary companies during 2000 has stimulated demand for reinsurance in key markets. Life reinsurance in particular has benefited both from strong growth in direct insurance and the ceding of more mortality risk to reinsurers. While competition among reinsurers has been intense, this has not led to a systematic underpricing.
Premiums for life business grew by 17% in the year 2000. If adjustments are made for distorting factors – exchange rate movements and a large single premium treaty in 1999 – the underlying rise was 12%. Life Admin Re premiums more than doubled, thanks both to the full-year effect of 1999 transactions and to new deals in 2000. Traditional business benefited from strong demand for life reinsurance in the North American and UK markets.
The management expense ratio (other operating costs and expenses in relation to operating revenues) declined in 2000. A continued focus on cost efficiency and the implementation of new systems should together generate further savings in the next two years.
Demand for traditional life reinsurance in the US should remain strong. Primary companies will continue to need the specialised capital and risk-management solutions which leading reinsurers offer. In addition, the extension of primary market distribution channels, especially through banks, will create new reinsurance opportunities. Swiss Re's strong market position and full-service capability mean that the Group is well positioned to satisfy clients’ needs in all these areas of business. Continuing consolidation and rationalisation in the primary market should also sustain the demand for Admin Re.
In Europe, the welfare and health-care provision regimes are likely to change significantly in the medium term; insurance and reinsurance products will need to be developed or adapted to respond to evolving conditions. Swiss Re will be working closely with clients to meet these challenges.
In Asia, and particularly in Japan, insurance and reinsurance markets will be strongly inf luenced by general economic conditions. Liberalisation of the insurance markets in China and India should provide new reinsurance opportunities for Swiss Re over the long term.
Net investment income 422 458 9 Net realised investment gains 659 738 12
In its core markets, NCM, a primary credit insurer, maintained its strong market positions, and further expanded its business activities with the acquisition of SIC (Società Italiana Cauzioni), the leading primary surety provider in the Italian market.
Swiss Re experienced sustained strong demand for sophisticated, risk-based, corporate finance solutions, which resulted from the continued convergence of the banking and insurance sectors. Very good performance was seen in alternative asset reinsurance, contingent capital, life financial reinsurance solutions, and special asset-backed risks. In the run-off business, the unit closed a modest number of new transactions, ref lecting both Swiss Re Financial Services’ continued disciplined approach to this business, and the fact that the run-off market in general was very competitive.
Swiss Re New Markets’ solid position as the market leader for risk-based corporate finance solutions was recently confirmed when it was nominated “Alternative Risk Solutions House of the Year” by the industry publication Risk magazine. Innovative structured transactions for Enron, Michelin, Royal Bank of Canada, and Arby’s were cited as prime examples of Swiss Re’s ability to deliver sophisticated solutions for its clients’ expanding risk and capital management needs.
Casualty business produced a satisfactory result with continued sound reserve setting particularly in light of the very difficult and competitive market conditions. Recent offers are providing evidence that market conditions are firming up, reinforcing the optimistic outlook for 2001.
Aviation premium volume increased substantially due to growth in the space business and to the successfully managed aviation cycle, whereby Swiss Re increased its involvement in an improving market. Swiss Re New Markets is very optimistic that the continued growth of aviation premium levels in 2001 will generate continued volume growth and an improved result in 2001.
Private equity and participations Gross revenues declined due to the absence of a CHF 341 million gain realised on the sale of the Group’s 20% interest in Credit Suisse Financial Products in
Capital Partners manages in its private equity business several funds, totalling over CHF 1 billion, both for Swiss Re and for third parties. Securitas, a USD 500 million fund, was formed in 1995 to invest in the insurance industry. While the insurance investing environment in 1999 was not very conducive to great economics, the environment changed in 2000 when the pace of investment activities doubled, directly committing over USD 143 million to 7 companies in 4 countries. The portfolio at year-end ref lected total commitments of USD 245.8 million.
Asset management Premiums earned 0 0 Net investment income1 0 1 Other revenues2 209 212 Gross revenues 209 213
It also continued to invest in ideas and technology that will maintain Swiss Re’s competitive advantage. In order to improve long-term efficiency certain initiatives were undertaken to reduce the cost base – such as a reduction in the number of data centres in 2000. The Corporate Centre also completed a number of other notable achievements in 2000, including the opening of Rüschlikon, Swiss Re’s centre for global dialogue.
Increased Group-wide reporting efficiency by the implementation of the Financial Systems Architecture
The IT division supports Swiss Re’s global IT organisation in its dual role: enabling efficient business processes Group-wide and driving innovation. It also ensures efficient project portfolio management and resource allocation to make best use of synergies.
New business solutions for 2000 included a Group-wide client management system to enhance global client relationships; a harmonised information architecture to support worldwide risk and performance analysis; and an Internetbased knowledge management facility. A cost-efficient, standardised technical IT infrastructure has enabled the implementation of further innovative webenabled systems throughout the Group.
Business groups’ operating income 3 751 4 042 Corporate Centre expenses – 293 – 321 Items excluded from the business groups: Net realised gains/losses 370 625 Amortisation of goodwill – 211 – 310 Other income/expenses – 388 – 381
In 2000, as an integral part of its Corporate Centre activities, Swiss Re continued to build on the efficient use of its capital base. The active management of the capital structure – equity, debt and hybrid capital – allows Swiss Re to retain financial flexibility at a low weighted average cost of capital. Among other initiatives in 2000, the launch of a European Medium Term Note programme and the repurchase of Swiss Re shares exemplified the successful implementation of this strategy.
Swiss Re also launched a European Medium Term Note (EMTN) programme, a platform for raising funds from different investor categories in 14 different currencies, up to a nominal USD 1 billion outstanding at any time. At the end of 2000, pursuant to this programme Swiss Re had debt outstanding of an aggregate face value of USD 240.4 million, rising to USD 527.5 million by the end of March 2001.
In February 2001, Swiss Re repurchased Adjustable Conversion-Rate Equity Security Units (ACES), assumed in the acquisition of Life Re Corporation. The nominal amount of the repurchases was USD 37.6 million. The remaining securities were redeemed on 15 March 2001, retiring a nominal amount of USD 42 million.
Apart from a private placement of CHF 200 million which will mature on 7 June 2001, Swiss Re has no other maturities of senior debt or hybrid capital during this year. It does, however, plan to increase the capacity of its EMTN programme to USD 2.0 billion during 2001, thus further extending its financial f lexibility.
Following the reduction in share capital and the share split, the Board of Directors proposes to the General Meeting that conditional capital amounting to no more than CHF 900 000 be created for issuance of convertible bonds, and CHF 700 000 for employee share and option plans.
Group risk management provides the Executive Board and the Board of Directors with the necessary tools to measure risks accurately. It supports a range of processes, including adequate risk identification and measurement, reporting and controlling, capacity allocation and approval – all of which are essential for value-oriented decision-making.
Swiss Re takes an integrated approach to managing its risk, modelling the combined effect of all individual risk exposures. The effect of adding any new risk – such as through an acquisition – is assessed in the context of the whole portfolio. In particular, the model identifies accumulation and diversification effects. A new exposure to California earthquakes, for example, will diversify a portfolio with existing exposure to earthquakes in Japan. Groups of interdependent exposures within a portfolio, however – such as a set of California earthquake risks – will not have this desired diversification effect. A case in point is credit risk, which is highly interdependent with financial market risk.
Swiss Re is exposed to a great diversity of risks. The Group risk model regulary updates all relevant insurance, credit and financial market risk exposures, to ensure that every new exposure and risk interdependency is considered. Among the latest developments in this field is a model which describes the dependency between financial market and credit risks.
Group risk management reports to the Executive Board and Board of Directors giving a detailed analysis of the Group’s risk exposure and its sources as well as views on the adequacy of Swiss Re’s capitalisation. This reporting analyses changes in the risk landscape and also serves as the basis for evaluating business plans or possible acquisitions.
The reorganisation of Swiss Re’s non-life operations, announced in early 2001, is designed to further improve its competitive position in a substantially hardening market. Demand for insurance-based corporate finance solutions – an area in which Swiss Re has well-established strengths – is also increasing. In the life business, Swiss Re can take advantage of its leadership position, benefiting from economies of scale in strongly-growing traditional life reinsurance markets, and expanding its Admin Re business.
Early 2001 also saw the formation of the Financial Services Business Group, comprising: Swiss Re Investors, with its asset management and asset liability management focus; Swiss Re New Markets, which concentrates on underwriting business to large corporate clients, as well as aviation and space risks, structured finance and credit solutions; and Capital Partners, Swiss Re’s private equity division, which includes the investment bank Fox-Pitt, Kelton and credit insurer NCM. The aim of the Financial Services Business Group is to promote the convergence of reinsurance and financial solutions and judiciously expand the existing range of products and services while co-ordinating marketing activities and consolidating the risk management and financial management areas.
Swiss Re successfully negotiated significant improvements in non-life reinsurance conditions and prices during the 1 January 2001 renewal period. These improvements covered most of its business in the largest non-life markets: Europe, North America and parts of Asia. Business relationships which were not in line with profit requirements were either re-underwritten, reduced or closed. Swiss Re expects any loss of business to be recouped, in original currencies, by new business and price increases.
Swiss Re’s entire non-life reinsurance portfolio is showing the positive effects of improved conditions and higher prices. In parallel with this welcome trend in its own reinsurance business, Swiss Re sees direct insurance rates and conditions improving in its largest relevant markets. One cause of hardening prices and conditions has been the withdrawal of capital from reinsurance markets and a similar reduction of capacity in the retrocession markets. Swiss Re therefore expects that the trend towards improved prices and conditions will continue for the balance of renewals in 2001 and on into 2002. Given this expectation and barring extraordinary or unusually high losses, Swiss Re believes that one of its major targets for 2001 is within reach: a combined ratio of 107%.
Swiss Re has already achieved a leading position in insurance-based corporate finance solutions. Changes in the non-life market environment and in the financial options facing large corporate clients suggest that demand in this area is likely to increase, offering attractive growth opportunities for Swiss Re.
: m o re a b o u t Iv o M
Swiss Re has built a leading e-business position in the reinsurance industry: 22 e-solutions are currently available to clients and further diversified e-initiatives are being implemented. The Swiss Re Client Portal increasingly serves as the integrated entrance point to all Swiss Re’s e-business solutions and services.
Clients actively participate in interactive services such as the Food Forum, the first of several planned industry communities. In December 2000, Swiss Re launched an industry-wide reinsurance risk exchange inreon (insurance meets reinsurance online), in partnership with Munich Re, Accenture and the venture -capitalist Internet Capital Group.
In 2000, nearly 300 people at Swiss Re were working on the development of e-solutions.
In 2000, the insurance industry witnessed the highest loss amounts due to flooding ever recorded. Floods are an extremely complex phenomenon. To date, there has not been a computer-aided model based on physical processes and probabilities which can be used to estimate this insurance risk. My team and I want to be the ones to make this breakthrough, thus laying the foundation for much improved risk management. We are well on the way to achieving this.
Swiss Re’s continuing commitment to environmental management covers three areas: reinsurance, investment and internal operations. During 2000, the Group further developed its environmental risk management, increased the importance of sustainability-relevant factors in its business and continued a risk dialogue with its stakeholders.
Swiss Re has a leading position as a reinsurer in the US environmental market. In Europe, it is closely involved in national environmental insurance pools. It has also built up its environmental presence in the emerging economies of Eastern Europe and Asia by providing training courses and client seminars. Swiss Re’s study on greenhouse gas emission trading shows promising future market opportunities.
Swiss Re has further increased its environmental portfolio to CHF 87 million. This portfolio now comprises balanced direct investments in 11 companies, 2 holding companies and 2 investment funds.
All Swiss Re’s construction and renovation projects in Switzerland conform to the recognised MINERGIE standard, which defines limits for a building’s energy consumption. Internal environmental management in Zurich has been certified to the ISO 14001 standard.
Swiss Re is represented in the Dow Jones Sustainability Group Index; other sustainability and environmental rating agencies, such as Oekom and Centre Info, continue to rank the Group as a leader within the insurance industry. Around 2% of all Swiss Re shares are estimated to be held by institutional investors who build up their portfolios through systematic consideration of environmental and social performance criteria.
Consistent with its role as a global leader in risk management, Swiss Re places the highest importance on good corporate citizenship in its internal and external relations. The Group-wide Code of Conduct defines individual and corporate roles in maintaining the high standards of responsibility which form the core of Swiss Re’s brand and reputation.
“Rüschlikon has been called not just the brain, but the new heart of Swiss Re.” Walter Anderau, Head of Communications & Human Resources
Rüschlikon, Swiss Re’s centre for global dialogue, opened in November 2000. It offers a platform for sharing knowledge, building networks, identifying the topics of the future and generating sustainable innovation. A broad range of internal and external events take place in Rüschlikon, focusing on applied research, business solutions and corporate development – designed to generate tangible results for all stakeholders.
Applied research, in this context, means detecting emerging risks and identifying business opportunities. Together with its partners in risk management, Swiss Re examines issues in the economy, business, science and technology, to assess their impact on the industry. The inaugural Rüschlikon conference, Digital Worlds, investigated the strategic, legal and risk implications of increasing digitalisation.
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Water is gradually emerging as an investment topic. Billions of dollars need to be invested to renew drinking water and sewage systems in industrialised countries. In some developing countries, this type of infrastructure does not exist at all. Furthermore, in the northern and southern hemispheres, very innovative and sustainable concepts and technologies are needed that allow environmentally-friendly deployment of scarce water resources. I find it fascinating to search out and invest in companies who are today working on solutions for tomorrow, thereby creating for themselves an excellent foothold in a growing market.
The accompanying notes are an integral part of the consolidated financial statements. 1999 figures have been restated (see notes 1 and 19).
Mortgages and other loans Investment real estate Short-term investments, at amortised cost which approximates fair value Other invested assets Total investments
Current liabilities Unpaid claims and claim adjustment expenses Liabilities for life and health policy benefits Unearned premiums Funds held under reinsurance treaties Reinsurance balances payable Income taxes payable Deferred income taxes Short-term debt Accrued expenses and other liabilities Total current liabilities Long-term debt Total liabilities
Shareholders’ equity Common shares, CHF 10 par value; 1999: 14 730 951 and 2000: 14 658 301 shares authorised and issued Additional paid-in capital Accumulated other comprehensive income: Net unrealised investment gains, net of deferred taxes Cumulative translation adjustments
Total accumulated other comprehensive income Retained earnings Reserve for own shares Total shareholders’ equity Total liabilities and shareholders’ equity
CHF millions stock capital net of tax ments earnings shares Total
Balance as of 31 December 1998 Net income Unrealised gains on securities, net (note 2) Foreign currency translation adjustments Dividends Change in own shares (note 10)
Balance as of 31 December 1999 Net income Unrealised losses on securities, net
Cash flows provided (used) by investing activities Fixed income securities – Available for sale: Proceeds from sale of investments Purchase of investments Net purchase of short-term investments
Equity securities – Available for sale: Proceeds from sale of investments Purchase of investments
Cash flows provided (used) by financing activities Issuance of long-term debt Issuance (repayment) of other debt Repurchase of common shares Dividends paid Net cash provided (used) by financing activities
Non-point source (NPS) pollution deals with the uncontrolled run-off into bodies of water resulting from polluted rainfall, snowmelt or irrigation practices. Agriculture is a major source of NPS. We research the topic and its impact on the environment, the population as a whole, and our business. We follow developments in regulations, produce guidelines for underwriting, and assist our clients in product development. What fascinates me is the potential we have as a reinsurer to positively impact the effects of human practices on the environment and human health.
The accompanying consolidated financial statements have been prepared in accordance with the Accounting and Reporting Recommendations (ARR) and comply with the Swiss Company Law and include the financial statements of Swiss Re Zurich and its subsidiaries. The presentation requirements of ARR 14 have been complied with except certain financial information has been disclosed in the notes and not in the primary financial statements. All significant intercompany transactions and balances have been eliminated in consolidation.
In the current year the Swiss Re Group is modifying the presentation of its consolidated financial information to improve comparability with more widely accepted international practice. In connection with this effort, the Group has also changed certain accounting policies from one acceptable method to another under the Swiss ARR basis and has restated its previously reported 1999 consolidated financial statements to conform to the new basis (see note 19).
Short-term investments are carried at amortised cost, which approximates fair value. The Group considers highly liquid investments purchased with an original maturity of one year or less, but greater than three months, to be short-term investments.
The Group enters into security lending arrangements under which it loans certain securities in exchange for collateral and receives security lending fees. The Group’s policy is to require collateral equal to at least 102% of the carrying value of the securities loaned. The collateral held consists of deposits, cash or other securities. The liability for collateral held is included in accrued expenses and other liabilities. Security lending fees are recognised over the term of the related loans.
Derivative instruments which do not meet the criteria for hedge accounting or which are held for investment purposes are carried at fair value with changes in unrealised gains and losses recognised in income.
A foreign currency swap operates in a similar way to an interest rate swap. Different currencies are exchanged, based on a notional amount, at an agreed upon exchange rate at the beginning and the end of the swap. Foreign currency swaps purchased in anticipation of a firm commitment to make foreign currency asset purchases are carried at fair value with related unrealised gains or losses deferred until the asset purchase date, at which time the deferred gain or loss is recognised in income offsetting the change in value of the underlying asset or liability.
The Group uses equity options to lock in sales prices for investments in equity securities and to improve investment returns on its equity security investments. Options are carried at fair value as available for sale, with changes in carrying value included in other comprehensive income.
Cash and cash equivalents include cash on hand, highly liquid debt instruments, and short-term deposits purchased with an original maturity of three months or less.
Deferred acquisition costs associated with life and health reinsurance business are amortised over the premium paying period. For investment-type contracts, deferred acquisition costs are amortised in relation to the present value of estimated gross profits and are adjusted to reflect the estimated effect of realising unrealised investment gains and losses with an offset to unrealised investment gains and losses included in shareholders’ equity.
The carrying value of PVFP is reviewed periodically for indicators of impairment in value. Adjustments to reflect impairment in value are recognised in income during the period in which the determination of impairment is made.
The carrying value of goodwill is reviewed periodically for indicators of impairment in value. Adjustments to reflect an impairment in value are recognised in income in the period in which the determination of impairment is made.
Separate account business assets and liabilities are valued at market value and unrealised gains/losses are included in the income statement. Own use real estate and property, plant and equipment are carried at depreciated cost. Deferred expenses on retroactive reinsurance policies are amortised into income over the expected claims paying period.
Liabilities for life and health policy benefits are generally calculated using the net level premium method, based on assumptions as to investment yields, mortality, withdrawals and policyholder dividends. Assumptions are set at the time the contract is issued or, in the case of contracts acquired by purchase, at the purchase date. The assumptions are based on projections from past experience, making allowance for possible adverse deviation. Interest assumptions for life and health reinsurance benefits liabilities range from 4% to 14%. Assumed mortality rates are generally based on experience multiples applied to actuarial select and ultimate tables commonly used in the industry. Withdrawal assumptions for individual life reinsurance contracts issued by the Group range from 1% to 20% and are based on historical experience.
Liabilities for investment-type contracts, including separate account (unit-linked) life reinsurance business, are based either on the contract account balance, if future benefit payments in excess of the account balance are not guaranteed, or on the present value of future benefit payments, if such payments are guaranteed. Liabilities for policy benefits are increased if it is determined that future cash flows, including investment income, are insufficient to cover future benefits and expenses.
Life reinsurance premiums are earned when due. Related policy benefits are recorded in relation to the associated premium or gross profits so that profits are recognised over the expected lives of the contracts. For investment type contracts, charges assessed against policyholders’ funds for the costs of insurance, surrender charges, actuarial margin and other fees are recorded as income.
Premiums and losses ceded under retrocession contracts are reported as reductions of premiums earned and claims and claim adjustment expenses. Amounts recoverable for ceded claims and claim adjustment expenses and ceded unearned premiums under these retrocession agreements are reported as assets in the accompanying consolidated balance sheet.
The excess of estimated liabilities for claims and claim costs payable over consideration paid in respect of retroactive non-life reinsurance contracts which meet risk transfer tests is recorded as a deferred charge. The deferred charges are amortised over the expected settlement periods of the claims liabilities.
The Group has an investment concentration with Credit Suisse Group. As of 31 December 1999 and 2000, the Group’s investments in equity securities included CHF 3 481 million and CHF 2 469 million, respectively, of Credit Suisse Group securities at fair values and CHF 370 million and CHF 331 million, respectively, of other operating assets.
Due in one year or less Due after one year through five years Due after five years through ten years Due after ten years Mortgage and asset-backed securities Total fixed income securities
As of 31 December 1999 and 2000 investments in mortgage and other loans, real estate and investment for separate account business comprised the following: As of 31 December 1999 2000
Mortgages and other loans Investment real estate Investment for separate account business
As of 31 December 1999 and 2000 the Group’s investment in mortgages and other loans included CHF 170 million and CHF 204 million, respectively, of loans due from employees and CHF 284 million and CHF 322 million due from officers. These loans generally consist of mortgages offered at variable and fixed interest rates.
The Group’s investment in mortgages and other loans included CHF 955 million and CHF 1 483 million of mortgage participations associated with linked investment contracts as of 31 December 1999 and 2000, respectively. Contract holders bear all investment risk related to mortgage participations. Fair value for other loans is considered to be equal to carrying value.
Depreciation expense related to income producing properties was CHF 28 million and CHF 27 million for 1999 and 2000, respectively. Accumulated depreciation on investment real estate totalled CHF 631 million and CHF 638 million as of 31 December 1999 and 2000, respectively.
Substantially all mortgages and other loans receivable are secured by buildings and land. The ultimate collectibility of the receivables is evaluated regularly and an appropriate allowance for uncollectible amounts is established.
Fixed income securities Equity securities Mortgages and other loans Real estate Short-term investment Other current investment Income on investments in affiliated companies Equity in earnings of equity accounted investees Cash and cash equivalents Deposits with ceding companies Gross investment income Less investment expenses Net investment income
The Group uses derivative financial instruments with the following characteristics: Contract/ Carrying
Other derivatives Credit derivatives Catastrophe derivatives Weather derivatives Total other derivatives
Equity and index contracts Forwards and futures Options Total equity and index contracts
Underwriters Reinsurance Group, Inc., a US broker reinsurance company based in Calabasas, California, was acquired for CHF 1 084 million on 10 May 2000.
On 1 January 2000, the acquisition of Washington International Insurance Company for CHF 82 million was completed by the Group. Washington International writes mainly credit and surety business.
Acquisitions resulted in CHF 539 million and CHF 426 million being capitalised in 1999 and 2000, respectively. The net amortisation charge recorded in the income statement for 1999 and 2000 amounted to CHF 242 million and CHF 270 million, respectively. The change in unrealised gains increased the balance by CHF 242 million in 1999 and decreased the balance by CHF 200 million in 2000. The foreign exchange impact in 1999 was CHF 298 million, and in 2000 CHF –6 million.
In conjunction with the acquisitions, CHF 126 million and CHF 874 million of goodwill was recorded in 1999 and 2000, respectively. During the years ended 31 December 1999 and 2000, goodwill of CHF 211 million and CHF 310 million, respectively, was amortised.
As of 31 December 1999 and 2000, the balance of accumulated goodwill amortisation was CHF 394 million and CHF 664 million, respectively.
Balance as of 1 January Deferred Effect of portfolio acquisitions Amortisation Foreign exchange Balance as of 31 December
Total subordinated debt 1999 1 998 1 assumed in the acquisition of Underwriters Re Group 2 assumed in the acquisition of Life Re Corporation
Maturity Instrument in Currency in m rate in CHF m 2017 Payment Undertaking Agreement 2000 USD 64 Libor–15bp 104
Interest expense on long-term financial debt as of 31 December 1999 and 2000, respectively, was as follows: CHF millions 1999 2000
The majority of interest payments on debentures are payable annually with the principal due at maturity. Interest on bank and other loans is generally due semiannually with principal due upon maturity.
In May 1998, the Group issued CHF 1 010 million of multi-currency subordinated debt with a perpetual term, bearing interest at the rate of six-month LIBOR plus 37.5 basis points, for the first tranche of CHF 300 million, LIBOR plus 40 basis points for a tranche of DEM 340 million, LIBOR plus 45 basis points for a tranche of DEM 110 million payable semi-annually and 5.71% for a tranche of DEM 400 million, payable annually. The loan is subordinated in the event of liquidation to all senior creditors of Swiss Re Zurich, but will be paid in priority to all holders of its equity.
Asbestos and environmental claims exposure 7. Unpaid claims and claim adjustment expenses
The Swiss Re Group’s obligation for claims payments and claims settlement charges also includes obligations for long latent injury claims arising out of policies written prior to 1985, in particular in the area of US asbestos and environmental liability.
A reconciliation of the beginning and ending reserve balances for asbestos, environmental and other long latent liability claims and claim adjustment expenses for the periods presented is as follows: CHF millions 1999 2000
Balance as of 1 January Less reinsurance recoverable Net Claims incurred Less paid Effect of foreign currency translation Effect of acquisition Net Plus reinsurance recoverable Balance as of 31 December
The routine reassessment has demonstrated that reserves established in prior years continue to be sufficient. This, in combination with an active commutation strategy, allowed for an overall release of provisions relating to long latent injury claims during 2000 of roughly 8%. In both 1999 and 2000, the Group was successful in achieving some major commutations which have significantly reduced future exposure to these types of claims. When commutation payments are made, the traditional “survival ratio” is artificially reduced by premature payments which should not imply a reduction in reserve adequacy.
Provisions for long latent injury claims outstanding on 31 December 2000 reflect the estimated future trend of claims payments and claims settlement charges. Due to the inherent uncertainties and assumptions on which these estimates are based, however, we cannot exclude the need to make further additions to these provisions in the future.
Premiums, claims and claim adjustment expenses are reported net of retrocession in the Group’s income statement. Gross, retroceded and net amounts for these items were as follows: Non-Life Business Group
Premiums written Change unearned premiums Claims paid Claims and claim adjustment expenses
Basic earnings per share Income available to common shares Weighted average common shares outstanding Net income per share in CHF
Included in treasury shares are 126 032 and 196 805 authorised and issued shares as of 31 December 1999 and 2000, respectively, which are kept in escrow for satisfying obligations arising from employee options.
Realised gains 520 Own shares held on 31 December 1999 at cost 580 496 1 005 Own shares held on 31 December 1999 at market value 580 496 1 497
Capital reduction from share repurchase –72 650 –195 Realised gains 391 Own shares held on 31 December 2000 at cost 74 954 249 Own shares held on 31 December 2000 at market value 74 954 293
Deferred tax assets Technical provisions Unrealised losses on investments Benefit on loss carryforwards Other
As of 31 December 2000, the Group had CHF 1 476 million of foreign net operating tax loss carryforwards, expiring as follows: CHF 7 million in 2001, CHF 7 million in 2004, CHF 12 million in 2005 and CHF 1 450 million after 2005. The Group also has capital loss carryforwards of CHF 125 million expiring as follows: CHF 4 million in 2003, CHF 10 million in 2004, CHF 104 million in 2005 and CHF 7 million after 2005.
Benefit obligation as of 1 January Service cost Interest cost Amendments Actuarial loss (gain) Benefits paid Acquisitions Foreign currency translation adjustments Benefit obligation as of 31 December
Actual return on plan assets Company contributions Benefits paid Acquisitions Curtailment/settlement Foreign currency translation adjustments Fair value of plan assets as of 31 December
Reconciliation of balance sheet Funded status Unrecognised loss (gain) Unrecognised prior service cost Unrecognised transition obligation
(net of participant contributions) Interest cost Expected return on assets Amortisation of: Net (gain) loss Prior service cost Transition obligation (asset)
As of 31 December 1999 and 2000, the Group had two and one, respectively, stockbased compensation plans, which are described below.
Under the fixed option plan, the Group may grant options for a certain number of Swiss Re shares to members of the Executive Board and certain members of management each year. Under the plan, the exercise price of each option equals the market price of the shares on the date of the grant. Options issued vest at the end of the fourth year and have a maximum life of ten years.
Outstanding, 1 January Options granted Options exercised Options forfeited Outstanding, 31 December
Exercisable, 31 December Weighted average fair value of options granted during the year
The following table summarises the status of fixed stock options outstanding as of
From annual option plans 1995 – 1999, an aggregate of 40 030 options to purchase the same number of shares were held by members of the Executive Board, as of 31 December 2000. Options vest after four years.
Under the plan, Swiss Re Zurich sold 6 525 shares to employees with an associated cost of CHF 7 million in 1999. This cost is included in other operating costs and expenses.
As of 31 December 1999 and 2000, the Group had outstanding guarantees of CHF 2 455 million and CHF 2 815 million, respectively.
As part of its regular business, the Group makes capital (equity, debt) available to clients, contingent on the occurrence of a defined event. These commitments expire as follows: As of 31 December 2000 CHF millions
The corresponding lease expenses incurred in 1999 and 2000 were CHF 44 million and CHF 41 million, respectively.
In the normal course of business operations, the Group is involved in various claims, lawsuits and regulatory matters. In the opinion of management, the disposition of these or any other legal matters will not have a material adverse effect on the Group’s business, consolidated financial position or results of operations.
The Group acts as manager for certain pooled funds that operate similar to mutual funds. As of 31 December 1999 and 2000, net third party assets under management at market value were CHF 3 720 million and CHF 6 017 million, respectively. The Group also manages an investment portfolio belonging to a group of companies in which the Group has an investment that is accounted for using the equity method. The market value of the portfolio, which is not recorded in the Group’s balance sheet, amounted to CHF 864 million and CHF 784 million as of 31 December 1999 and 2000, respectively.
The Group provides reinsurance and financial services throughout the world. Swiss Re Group has three business groups, which are determined by the organisational structure. These are Non-Life Business Group, which includes property-casualty reinsurance; Life & Health Business Group, which includes life, health and disability reinsurance; Financial Services Business Group, which includes Swiss Re Investors, Capital Partners and New Markets. The Corporate Centre provides direction and Group-wide support to the business groups.
The main expenses excluded from the measurement of segments are goodwill amortisation, interest expenses, indirect taxes and foreign exchange gains/losses.
Expenses Claims and claim adjustment expenses Acquisition costs Other operating costs and expenses
Claims ratio in % Expense ratio in % Combined ratio in %
Revenues Premiums earned Net investment income Net realised investment gains Other revenues Expenses Claims and claim adjustment expenses Acquisition cost Other operating costs and expenses
Ireland Swiss Re International Treasury Ltd. 100 f Bavarian Reinsurance Ireland Ltd. 100 f
Netherlands Holland Re Holding B.V. with 2 subsidiaries 100 f NCM Holding N.V. with 11 subsidiaries 90 f
Barbados Atlantic International Reinsurance Company Ltd. 100 f European Atlantic Reassurance Company Ltd. 100 f European Finance Reinsurance Company Ltd. 100 f European International Holding Company Ltd. 100 f European International Reinsurance Company Ltd. 100 f Stockwood Reinsurance Company Ltd. 100 f
Method of consolidation: f full e equity 82 Swiss Re Annual Report 2000
Swiss Re New Markets Corporation 100 f Underwriters Re 100 f Washington International Insurance Company 100 f
Australia Swiss Re Australia Ltd. 100 f Swiss Re Life & Health Australia Limited 100 f The Mercantile and General Reinsurance 100 f
Company of Australia Limited Swiss Re Investors Australia Pty Ltd. 100 f
Reconciliation of previously published 1999 figures to new basis Swiss GAAP
For new basis Swiss GAAP, the excess of the cost of the acquired businesses over the fair value of the net assets acquired is recorded as goodwill and amortised over periods of between 5 and 20 years. Under the old basis, goodwill arising on the acquisition of consolidated entities was offset through retained earnings.
Included with provisions for unpaid claims are provisions for estimated future costs associated with the settling of incurred claims. The change in the provision is recorded as part of claims expenses in the income statement. For the old basis, the recording of such items was in accordance with statutory practice of the respective Group company.
Assets and liabilities denominated in foreign currencies are translated at the rates of exchange on the balance sheet date. Revenues and expenses are translated at average exchange rates. Unrealised gains or losses resulting from translation of functional currencies to the reporting currency are included in the currency translation account in equity. Under the old basis, all items in the balance sheet and income statement denominated in a foreign currency were translated at the year-end rate of exchange. The difference resulting from the revaluation of opening balances was recorded in retained earnings.
Our audit was conducted in accordance with auditing standards promulgated by the Swiss profession and with the International Standards on Auditing issued by the International Federation of Accountants (IFAC), which require that an audit be planned and performed to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the consolidated financial statements. We have also assessed the accounting principles used, significant estimates made and the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
Swiss Reinsurance Company performs a dual role within the Swiss Re Group as both a reinsurance and a holding company. The assessment of the market position, profitability and financial strength of our world-wide organisation must focus primarily on the consolidated financial statements.
This decline in profit is attributable to the technical result, which fell considerably from CHF –487 million in the previous year to CHF –1 321 million. In contrast, the non-technical result rose from CHF 2 436 million in 1999 to CHF 2 646 million.
In the year under report, a strong growth in premium volume was recorded, as net premiums written increased by 16% to CHF 8 525 million. This was accompanied by lower administrative expenses and only modestly higher overall operating expenses. The technical result is marked by a considerable increase in claims incurred of CHF 1 354 million, which is partly related to Group internal retrocessions and a contribution of CHF 371 million to the provision for catastrophe claims (release of CHF 833 million in 1999).
The investment result rose by CHF 149 million to CHF 3 673 million. As a result of capital market trends, which continued favourably, realised gains on the sale of investments once again increased significantly and reached CHF 4 183 million. These were accompanied by valuation adjustments of CHF 2 044 million, which consisted predominantly of precautionary valuation adjustments to the securities portfolio as well as the write-off of goodwill resulting from acquisitions in recent years.
The balance sheet amount of investments increased by CHF 1.0 billion to CHF 37.8 billion. Most notably, participation assets increased due to capital contributions to existing subsidiaries.
Alexander J. B. Zehnder Director of Swiss Federal Institute for Environmental Science and Technology, Zurich
As of 31 December 2000, the company held four different perpetual subordinated liabilities totalling CHF 1942 million. These liabilities combine elements of debt and equity, and may be included in solvency calculations.
The 2000 financial year comprises the accounting period from 1 January to 31 December 2000. However, due to local convention, reinsurance business from Japan included in the accounts is for the period from 1 April 2000 to 31 March 2001.
The allocated investment return includes the actual investment income which can be directly attributed to the reinsurance business. In addition, it contains the investment return generated on the investments covering the technical provisions. The interest rate reflects the currency-weighted five-year average yield on fiveyear government bonds.
Notes Swiss Reinsurance Company Valuation principles 92 Swiss Re Annual Report 2000
The technical provisions are valued in accordance with the following principles: Premiums written relating to future periods are stated as provisions for unearned premiums and are normally calculated by statistical methods.
Claims paid Change in the provision for claims outstanding 2. Claims incurred 3. Change in the provision for life reinsurance 4. Profit commissions
CHF millions Gross Retro Net Gross Retro Net 8. Technical provisions Provisions for unearned premiums Provisions for life reinsurance Provisions for claims outstanding Provisions for profit commissions Provision for catastrophe claims
CHF millions 1999 2000 9. Other liabilities and accruals Creditors arising out of reinsurance operations Amounts owed to banks Debentures Loans Other creditors Accruals
Shareholders’ equity on 31 December after allocation of profit 1 Board of Directors’ proposal to the General Meeting of 31 May 2001
Contingent liabilities, mainly towards Group companies, amounted on 31 December 2000 to CHF 1 672 million (1999: CHF 2 149 million). In addition, there were 17 unlimited guarantees and other contingent liabilities; 14 of these are for obligations towards Group companies. No payments are expected under these guarantees.
To secure the technical provisions on the 2000 balance sheet date, securities in the amount of CHF 1 987 million were deposited in favour of ceding companies (1999: CHF 2 132 million). In addition, a mortgage of CHF 7 million exists on a real estate property with a book value of CHF 16 million.
The insurance value of tangible assets, comprising the real estate portfolio and other tangible assets, amounted on 31 December 2000 to CHF 2 605 million (1999: CHF 2 325 million).
Own shares held by the Swiss Re Group are stated on page 68.
Other liabilities and accruals are long-term liabilities in the amount of CHF 1177 million (1999: CHF 1408 million) and short-term liabilities amounting to CHF 3 439 million (1999: CHF 2942 million).
In the 1999 income statement, income and charges in the equal amount of CHF 3 500 million were netted. These positions resulted from a Group internal restructuring of participations and had no impact on the profit.
The independent actuary, Paul Embrechts, Oberrohrdorf, has confirmed in his report that the balance sheet provisions for the life reinsurance business stated at year-end 2000 have been calculated in accordance with European Union guidelines.
Share structure For the financial year 2000 – eligible for dividend – not eligible for dividend
The Board of Directors proposes to the General Meeting to allocate this profit as follows: in CHF 1999 2000
If the proposal of the Board of Directors is accepted, a dividend of CHF 50 per share will be paid.
After deduction of the Federal Withholding Tax of 35%, the dividend will be paid from 6 June 2001 by means of dividend order to shareholders recorded in the share register or to their deposit banks.
Kurt R. Spillmann Director of Centre for Security Studies and Conflict Research, Zurich
. S p il lm a n n a t w w w
Admin Re is the acceptance of closed blocks of in-force life and health insurance business either through acquisition or reinsurance including assuming the responsibility to administer the underlying policies.
Claims incurred and claim adjustment expenses: All claims payments plus the adjustment in the outstanding claims provision of a business year and claim adjustment expenses.
Sum of acquisition costs and other operating costs and expenses in relation to net premiums earned. This ratio enables the assessment of business performance in non-life reinsurance.
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.
Hail crop insurance: Insurance of crops in open fields, or of greenhouses and their contents against hail, storm and other natural hazards.
The probability of loss due to an insured object, hazard or interest. Risk involves the possibility of an event occurring causing a loss or an event occurring causing a loss that was larger than previously estimated.
Premiums earned less insurance losses and loss adjustment expenses and underwriting expenses (determined on a GAAP or statutory basis). Also referred to as GAAP underwriting result or statutory underwriting result.
Balance sheet Investments Other assets Total assets Unpaid claims and claim adjustment expenses Liabilities for life and health policy benefits Unearned premiums Other current liabilities Long-term debt Total liabilities
Outstanding bonds Instruments Maturity Issued in Currency Nominal Interest Price in millions rate 31.12.2000
Subordinated perpetual bond (SUPERBs) Perpetual 1999 CHF 600 3.75%* 94.00 * until 2011
Number of shares issued (par value CHF 10): of which reserved for corporate purposes
Average daily trading volume Stockmarket capitalisation3 1 per share entitled to dividend 3 based on shares entitled to dividend 2 all data as of 20 April 2001 4 subject to approval by the General Meeting, not including capital repayment of CHF 8
Shareholder structure Shareholders % Shares % Number of registered shares as of 31 December 2000: Number of unregistered shares 4 208 362 29.55 Number of shares entitled to dividend 14 243 623 100.00
Certain statements contained herein are statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in Swiss Re’s core markets, (ii) performance of financial markets, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) interest rate levels, (vi) currency exchange rates, (vii) increasing levels of competition, (viii) changes in laws and regulations, (ix) changes in the policies of central banks and/or foreign governments, and (x) general competitive factors, in each case on a global, regional and/or national basis.