to the General Meeting of the Shareholders on the 22 nd May 1964 60 Mythenquai, Zurich
Board of Directors E. Hürlimann, Honorary Chairman Paul Keller, Chairman C. J. Ahegg, Deputy Chairman Ernst Froelich Karl Brunner Paul Ruegger R. S. Hegner Hans Schindler Max H. Schneebeli Max Petitpierre
W. Küster W. Leimbacher Ch. Robert-Tissot H. Ryffel M. D. de Balis A. Schütz
E. A. Kubli P.-F. Niquille R. Ochsenbein H. Odermatt V. Philippi H. F. Rudolf H. Salzmann P. Schuppli E. Spargnapani
We have the honour to present to you the 100th Annual Report and Statement of Accounts of the Company for the year 1963. Whilst completing a century of gratifying expansion for our Company, the 100th business year may not in itself be regarded as satisfactory. The business experience in the actual underwriting sector is even less favourable than that of the previous year and for the first time for many years we must record a loss in the non-Life branches as a whole. In relation to the premium income the con­ stantly increasing incidence of claims in recent years, especially in the Fire and Third Party Liability branches, has become a serious feature particularly prominent in Europe and North America. That the decline in profit­ ability of insurance operations should have developed in continents possessing a high level of economic advance­ ment seems to be no coincidence. The inflationary aspects of the general boom and the precipitate rate of technical progress have created for the insurance industry, in con­ trast to most other sectors of the economy, more difficult conditions of existence: a sharp rise in the claims incurred, especially in Fire and Third Party Liability insurance, as a result of overemployment in industry and the chronic rise in prices. Sustained and determined efforts will be needed to adapt premiums to the enhanced risks and to limit claims by taking appropriate measures. The gross premium income has risen by Sw. frs. 81 million, or 6%, to Sw. frs. 1,361 million. All branches participate in this increase; the largest business increase was in the Life branch. The distribution of the premium income over the individual branches is as follows: Sw. frs. Sw. frs.
Fire 409,546,000 387,389,000 Hail 9,424,000 9,176,000 Burglary 24,234,000 20,457,000 Machinery, Water Damage, Plate Glass and Livestock 14,974,000 13,233,000 Marine 98,381,000 93,972,000 Accident 83,583,000 83,270,000 Health 77,913,000 73,596,000 Third Party Liability 381,138,000 360,128,000 Fidelity, Surety and Credit 53,363,000 47,928,000 Life 208,553,000 190,927,000
Compared with the previous year, our premium income for own account shows an increase of Sw. frs. 64 million to Sw. frs. 1,083 million.
In Third Party Liability insurance the volume of business has continued to expand, but less rapidly than in previous years. The claims experience in Motor insurance has again deteriorated alarmingly. The position in this branch is progressively becoming untenable for the reinsurer and it calls not only for the continuance of stringent remedial measures at the level of direct insurance but also for trenchant measures in regard to the structure and con­ ditions of a number of our reinsurance connections. General Third Party Liability insurance also closes with a marked deficit following an abnormal accumulation of major losses which affect the reinsurer particularly severely. On account of the broad international spread of our participations. Aviation Third Party Liability and Aircraft Hull insurance still leaves a satisfactory profit margin. Almost all our principal areas of operations contribute to the extremely unfavourable overall result of our Third Party Liability business, in particular once again Switzerland, where we have sustained a combined deficit in Motor and General Third Party Liability insurance of more than Sw. frs. 15 mil­ lion in the last three years.
The rise in premiums in Surety, Fidelity and Credit in­ surance continues to be satisfactory. The aggregate return remained fair but fell far short of the good result of the previous year. In keeping with the special nature of these varied lines, the business experience is subject to sharp fluctuations. We achieved an excellent result in the Con­ tinental and most of the overseas territories, although it is true that sizable loss recoveries contributed to this. On the other hand our North American business returned an ap­ preciable deficit.
In Life assurance the new business has again increased. The gross volume of new business reached the figure of Sw. frs. 2,294 million in sums assured, as against Sw. frs. 2,170 million in the previous year. The reassurance business in force at the end of the financial year amounted to Sw. frs. 9,700 million, compared with Sw. frs. 8,500 million on the 31st December 1962. The profit in the Life department is again gratifying, even though higher expenditure in res­ pect of death claims and the usual immediate amortization of commissions on new business has given a result below the high level of the previous year.
Common Shares of Public Utility, Industrial, Railway and other Companies 145,518,000 117,704,000
Of the assets of our Company Sw. frs. 173,770,000 are held by Trustees appointed by us in overseas territories.
All Classes excl. Life Sw. frs. Sw. frs. Sw. frs. Sw. frs.
Zurich, 27th April 1964 By order of the Board: P. Keller, Chairman
We have pleasure in recommending that the Accounts as at the 31st December 1963 be approved, that the Adminis­ tration of the Company be given full discharge in this respect with best thanks, and that the proposals of the Board regarding the distribution of the profit be accepted.
United States Branch 161 East 42nd Street, New York, N.Y. 10017
'North American Reinsurance Corporation 161 East 42nd Street, New York, N.Y. 10017 with Offices in Atlanta, Chicago and San Francisco
Canadian Reassurance Company 425 University Avenue, Toronto 2, Ontario with an Office in Montreal
Australian Reinsurance Company Ltd. 51 Queen Street, Melbourne C. 1 with Offices in Sydney and Hong Kong
Premium Income of Swiss Re Group gross and for own account
In addition to the parent company in Zurich, the Swiss Re Group comprises the branch offices, subsidiary companies and advisory offices shown on the preceding page. These organizations make the facilities and services of our business enterprise available to our ceding friends in all corners of the world. The form and functions of our Group members in fact differ considerably from one to another and a special role is assumed by the subsidiary companies. These are purely reinsurance companies which replace the parent company in certain markets and whose share capital is owned wholly by the Swiss Reinsurance Gompany. They retain an appreciable share of their premium income for own account and thereby contrast with the branch offices, which do not constitute economically independent units and whose reinsurance business appears in full in the accounts of the Swiss Reinsurance Company. In view of the relative growth of our subsidiary companies and the fact that they retain a substantial underwriting portfolio for own account, it is considered appropriate to include a rather more specific, statistical picture of their economic significance for the Swiss Reinsurance Gompany. The tables which follow provide a survey of the size and growth-rate of our subsidiaries and also the principal con­ solidated figures for the parent and subsidiary companies. They do not include companies in which we have a holding of less than 100 %. The gross premiums listed represent the sum of premiums recorded by the Swiss Reinsurance Company and by its subsidiaries. In order to obviate duplication, the inter­ company exchange of business has not been taken into account. By deducting retrocessions to companies outside the Group, we obtain the net retained premiums of the Group, as in­ dicated.
The parent and subsidiary companies contributed to these consolidated retained premiums as follows: in millions of Sw. frs. in millions of Sw. frs.
IS »58 IS »59 19 60 IS >61 IS »62 19(
Capital and Free Reserves The consolidated capital and free reserves of the Swiss Re Group attained the figure of Sw. frs. 359 million at the end of 1963, as against Sw. frs. 353 million at the end of the previous year.