Swiss Reinsurance Company Mythenquai 50/60, RO. Box, CH-8022 Zurich, Switzerland Telephone 01 2082121 Telex 815 722 sre ch Telefax 01 208 2999 Cables swissre
Holography This picture shows a photographic reproduction of a hologram. Laser beams permit the permanent storage of data in holographic form, e.g. for producing identity and credit cards.
Balance Sheet 21 Key Figures of Group Companies in 1984 44
Proposal of the Board of Directors 26 Addresses of Group Companies 48
Otfier income and outgo including taxes Profit applicable to minority sfiarefiolders
Consolidated net profit per sfiare Consolidated net profit per non-voting sfiare
Board of Directors Term to expire in Walter Diehl* Chairman, Zurich 1987
Rainer E. Gut Bassersdorf, Chairman of the Board of Directors of Credit Suisse, Zurich 1988
E. Luk Keller Erlenbach, Chairman and Managing Director of Eduard Keller Ltd., Zurich 1985
Flans R. Lüthy* Küsnacht, Chairman of the Board of Directors of IBM (Switzerland), Zurich 1985
Executive Committee and Group Management Chairman of the Board of Directors and Chairman of the Executive Committee and Group Management Walter Dietil
Genera/ Managers Paul E. Christen Paul-Francis Niquille Flermann Odermatt Flerbert Schönenberger
German-speaking Switzerland, Ger­ many, Austria, Netherlands, Denmark, Sweden, Norway, Finland, Iceland M. Nabholz, Senior Executive Manager E. Etter, Executive Manager B, Heyer, Executive Manager W. Müller, Executive Manager W. Rüetschi, Executive Manager U. Winter, Executive Manager R. Siegrist, Manager H.Volienweider, Manager
French- and Italian-speaking Switzerland, France, Italy, Spain, Belgium, Luxembourg, Greece, French-speaking Africa E. Jutzi, Senior Executive Manager R.Martignier, Executive Manager S. Patthey, Executive Manager R.Rüttimann, Executive Manager J.Steinrisser, Executive Manager A.Galtetti, Manager B.Giliiand, Manager M.-L Musy, Manager
Main lines: Accident/Liability, Motor, Fire, Hail, Burglary R. R. Doerr, Executive Manager M.A. Tobier, Executive Manager M. Bradley, Manager F. Eugster, Manager R Gasser, Manager R.Schilling, Manager R Szöiiösy, Manager H.-K.Zulauf, Manager
Special lines: Engineering, Aviation, Nuclear energy, Marine A. Bai, Executive Manager H. Fischer, Executive Manager W. Künzie, Executive Manager J.W. Youngs, Executive Manager M.-A. Bloesch, Manager M.Gasche, Manager W. Hersberger, Manager H. Lüthi, Manager O. Oisson, Manager H.F.Enzmann, Member ot Management H.Tiedemann, Member ot Management
Member ot the Executive Committee and Group Management Group Vice President Senior Vice President Vice President
W. Isler, Senior Executive Manager W. Schiegg, Executive Manager H.W.Kreis, Executive Manager R. Held, Manager R.Jeck, Manager G.SchmidIi, Manager
Reinsurance companies Australia, South Africa insurance companies Germany R. Hedlnger, Senior Executive Manager
Share register, organization, public relations, economic studies and other central services R.Rüesch, Executive Manager O. Jenni, Member of Management E. Schlenker, Member of Management
The net profit of the business year has been raised by 12% to Sw.frs. 101.2 million. The premium volume in original currencies again showed little increase. This modest growth in volume reflects the policy consistently pursued for years of exercising utmost restraint in reinsurance markets with inadequate premiums and conditions.
By far the highest loss burden stemmed from North American Property and Casualty business. In these branches the result is marred by several large individual losses and also by high additional reserves for late losses in Liability and Motor Third Party Liability business.
Moreover, the year's result was impaired by three storms in France, by the catastrophic hailstorm in the Munich area, which overall caused insured damage of approx. DM 1,500 million, and by an unusual accumulation of frost damage in England. The underwriting loss of the Swiss Re Group again rose.
catastrophe in San Francisco. However, the extremely high losses in the U.S. market did not hit the domestic in­ surance industry alone. Hundreds of insurers and rein­ surers scattered throughout the world and participating in American risks via an extensive network of reinsurance connections were likewise affected.
American insurers are currently implementing substan­ tial premium increases in the ailing branches. A sus­ tained improvement of the results of industrial fire insur­ ance is possible within a reasonable time if the remedial measures are consistently followed through. It is a dif­ ferent matter in Liability business. Here the conviction held by Swiss Re for years is becoming more and more accepted, also in the United States, namely that premium increases only tackle the symptoms unless essential changes are undertaken at the root, i.e. in the American legal and court system and also in the insurance condi­ tions. It is to be hoped that the initiatives taken in this re­ spect are very soon effective on a wide scale, if a genuine emergency in insurance and reinsurance for heavy risks in these categories is to be avoided.
The impassioned tale of woe told for years by insurers, but particularly by reinsurers, about increasing losses in industrial business is only too familiar. What was less easy to understand, however, was the absence of effec­ tive measures when the situation had been clearly recog­ nised and analysed. There were several reasons for this gross failure of awareness to lead to energetic action. Foremost among them was, no doubt, the strange but unshakeable readiness of an international reinsurance mar­ ket, that had become totally untransparent and avid for premiums, to absorb major and catastrophe risks at ob­ viously inadequate premiums and at increasingly more generous conditions, despite the warnings of major rein­ surers. This readiness was based on the widespread but erroneous assumption that sooner or later direct insurers would take the necessary corrective action without any prompting from reinsurers.
In the face of ever-increasing underwriting losses, it was only a matter of time before there was a drastic shrinkage of low-price reinsurance capacify. This has now occurred, following the effects of major American Liability and Prop­ erty losses and numerous industrial Fire, Storm and Frost claims.
It is to be hoped that those remaining in the reinsurance market will give due consideration to careful risk assess­ ment and rating and that direct insurers will pay more heed to the financial strength of their reinsurers.
In the year under report the gross premiums from all branches totalled Sw.frs. 4,367 million (previous year, Sw.frs. 3,982 million): of this total Sw.frs. 795 million (pre­ vious year, Sw.frs. 770 million) was retroceded, leaving net premiums amounting to Sw.frs. 3,572 million (previ­ ous year, Sw.frs. 3,212 million). The breakdown of gross premiums, both by region and by branch, has undergone little change.
Fire and General Liability business were again very much in deficit. Motor reinsurance produced a considerably higher loss than in the previous year. Overall the under­ writing loss in Non-Life reinsurance increased from Sw. frs. 257.6 million in the previous year to Sw. frs. 298.5 million. North American business in particular brought high losses in Fire, Liability and Motor reinsurance. The results of the entire North American insurance market reached a new low in the year under report. The effects on the business results of our subsidiary company were negative accordingly. Most difficult is the situation in North American Liability business, which in future can only be reinsured if major changes are made in the cover structure. In the other markets it was possible to achieve in some cases substantial improvements in Non-Life reinsurance.
be defended. In the year under report a succession of large Property losses occurred In Great Britain, partly caused by the forces of nature. Another series of storm losses affected France, worsening the result by Sw.frs. 50 million. The largest individual Fire loss amounted to Sw. frs. 9 million. The improvements in reinsurance condi­ tions implemented step by step over the years bore their first fruit in various countries. Further efforts are neces­ sary to bring about a thorough improvement in the rein­ surance results of industrial Fire business, not least be­ cause in certain markets, in which it has not yet been pos­ sible to implement premium increases, the reduction in losses was more of a fortuitous nature.
Hail reinsurance brought a slight increase of premium and a small loss which is largely due to the hailstorm over Munich on 12th July, 1984.
bility in North American jurisdictions in connection with covers for the U.S.-dcmiciled operations of European companies as well as for exports to the United States. We are convinced that North American business cannot be remedied by premium increases alone. Changes in the legal system and in court practice are necessary before claims inflation can be mastered. Efforts in this direction are currently being made in various quarters. It remains to be seen what tangible results they bring.
The premium volume of Marine reinsurance has in­ creased only slightly. The cessions of subsidiary compa­ nies declined. The loss in the year under report - after a positive result in the previous year - stems exclusively from the unfavourable run-off of treaties written in the Lon­ don market and since cancelled. The business of Swiss Re, Zurich, was positive. Despite the losses of former years, there has so far been reluctance to raise the pre­ mium rates in general. Further improvements are neces­ sary to achieve a level commensurate with the risk.
Tfie actuarial auditor, Mr. Marc-Henri Amsler, tias con­ firmed in his report that the technical reserves of the Life reinsurance business at the end of 1984 were calculated on the bases approved by the Swiss Federal Council.
The growth of net premiums by 11.3% corresponds pre­ cisely to the increase of business in force. Additional benefits, mainly disability cover, gained in significance in the reporting year as against basic Life cover.
Claims expenditure developed in proportion to the vol­ ume of business. As in the previous year, less had to be spent for the financing of new coinsurance business than was recouped from the earlier investment of funds. The stable business situation is reflected in both the re­ duction of outgo for surrenders and the correspondingly higher allocations to policy and premium reserves, and finally in the annual result of Sw.frs. 36.1 million, which is almost unchanged as compared to that of the previous year (Sw.frs. 35.9 million).
Electronic cash registers Lasers read the coded information printed on packages, which is passed on to a central computer for analysis. At the same time the prices and totals are automatically recorded at the check-out desk.
In 1984 the world continued the recovery that started in the previous year. It remained marked by the pronounced growth of the American economy. The Increasing need of the United States for Imported goods also enabled Euro­ pean Industrial nations to find their way back onto the growth path. Inflation In all Industrial countries declined further, although this basically gratifying development was overshadowed by the high and In some cases still rising unemployment.
After two hectic years a relatively quiet year followed on the share markets. As far as Europe was concerned, the detachment from the North American markets expected earlier finally became reality. Whereas the U.S. stock market stagnated and the Canadian one suffered a set­ back, the upward movement continued In Europe and Japan. The development was particularly positive In Great Britain and the Netherlands. Investment policy was directed at securing part of the capital gains achieved In markets with a particularly pronounced rise In prices and consequently higher threat of relapse. The hidden sur­ plus on share Investments therefore declined.
though a pronounced drop of real Interest rates was ex­ pected by many, the fall was only minimal. The hidden surplus on bond Investments rose slightly.
In the currency sector the U.S. dollar brought a surprise with an upward move to an extent which only very few ex­ perts had expected. At the end of the year its revaluation against the Swiss franc of 19% was higher than for all cur­ rencies of major Industrial nations. Apart from the pound sterling, the main European currencies and the Japanese yen were also valued higher against the Swiss franc (cf. table on page 22).
The balance-sheet value of capital market Investments and real estate of Sw.frs. 5,421 million Is Sw.frs. 721 mil­ lion higher than the previous year. This Increase Is due approximately equally to new Investments and foreign exchange fluctuations.
The first graphic on page 16 and the tollowing table show how capital market investments and real estate at bal­ ance-sheet values are distributed among the various in­ vestment categories. The second graphic on page 16 shows the breakdown by currency.
The structure ot total investments at balance-sheet val­ ues is shown in the tollowing table.
Capital Market Investments and Real Estate balance-sheet value in millions ot Swiss francs
After deduction otthe interest required tor the Lite insur­ ance and annuity fund and other technical reserves, the investment income amounted to Sw. trs. 528 million (pre­ vious year, Sw.trs. 425 million). This increase is due to additional investments with slightly higher yield and to foreign exchange fluctuations.
At mid-May, 1985, the share register listed 15,367 share­ holders (as against 15,487 in the previous year), 14,113 of which were natural persons and 1,254 legal entities. The ratio of the registered share capital owned by these two categories of shareholders has shown only insignificant change. Approximately 97% of the registered share­ holders were of Swiss nationality, owning overall more than 92% of the registered share capital.
During the reporting year there were on average 5,830 registered share transactions per month (previous year, 3,830).
The number of owners of the 44,000 bearer shares and 340,000 non-voting shares issued by the Swiss Re (240,000 of which from the 1980 issue and 100,000 from that of April, 1984) is not known.
Last year's General Meeting confirmed the re-election of Messrs. Hans Bühimann and Marcel Odier for a further four-year term of office, in addition, Messrs. Rainer E. Gut and Paul R. Joiies were elected to the Board of Directors for the first time.
Claims incurred incl. adjustment in outstanding claims reserve - 226,372,066 - 203,410,018
Total result before tax (1) + (2) + (3) 152,400,791 145,452,915 Taxes - 51,179,168 - 55,422,573
Technical reserves (unearned premiums and outstand­ ing claims) are based in principle on information provid­ ed by ceding companies. Additional reserves are formed on the basis of past experience for losses that are in­ curred but not reported. In Marine reinsurance technical reserves are calculated in accordance with practice using a lump-sum method. All these reserves are entered at the amounts which will presumably have to be paid in future for the underlying liabilities. Annuity liabilities from NonLife reinsurance and liabilities from Life business are calculated at actuarially determined present values. The technical reserves of Life reinsurance business are de­ termined on the bases approved by the Swiss Federal Council.
French franc 26.93 26.15 3.0-F Belgian franc 4.11 3.92 4.8-F Dutch guilder 73.- 70.95 2.9-F U.S. dollar 259.50 217.50 19.3-F Canadian dollar 196.50 175.- 12.3-F Yen 1.035 0.94 10.1 -F Rand 131.- 179.- 26.8- * rates in Swiss francs for 100 units of currency
The surrenders in business assumed amounted to Sw.frs. 42.3 million, of which Sw.frs. 4.1 million was deb­ ited to retrocessionaires. A total of Sw.frs. 38.2 million remained for own account as against Sw.frs. 78.0 million in the previous year.
The commissions and profit commissions accounted for gross business totalled Sw.frs. 1,140.2 million. Of this amount, Sw.frs. 229.2 million referred to retrocession­ aires, leaving Sw.frs. 911.0 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 rose by Sw.frs. 265.9 million to Sw.frs. 2,499.0 million.
The commissions and profit commissions calculated for business assumed totalled Sw.frs. 81.7 million. The retro­ cessionaires' share of this amount was Sw.frs. 1.2 million, so that Sw.frs. 80.5 million remained for own account.
This account closed with a positive balance of Sw.frs. 26.0 million (previous year, Sw.frs. 70.6 million). Realized capital gains and losses contributed a net profit of Sw.frs. 224.0 million (previous year, Sw. frs. 187.2 million). On the other hand, fluctuations in foreign currency rates on monetary transfers and the conversion of foreign cur­ rency balances led to a debit of Sw. frs. 24.2 million (previ­ ous year, Sw. frs. 3.7 million). The write-offs on capital mar­ ket investments and real estate amounted to Sw.frs. 123.7 million (previous year, Sw.frs. 94.1 million). Depre­ ciation outside the sector of investments led to an in­ creased debit of Sw.frs. 22.5 million, as opposed to Sw.frs. 5.3 million in the previous year.
As a result of payment difficulties in many countries, the balances outstanding there again grew. The conse-
quent risk of loss was taken into account by means ot an appropriate increase in the general and individual value adjustments. The outgo needed tor this amounted to Sw.trs. 27.6 million (previous year, Sw.trs. 13.5 million).
The balance-sheet value ot holdings rose by Sw.trs. 14.7 million to Sw. trs. 49.4 million. Loans to Group companies increased by Sw.trs. 55.6 million; on the balance-sheet date they amounted to Sw.trs. 508.3 million. These changes are mainly due to capital fund increases ot Group companies.
These comprise largely accrued investment income, i.e. investment income already earned but not yet received.
Ot the total amount ot Sw.trs. 319.9 million, Sw.trs. 317.4 million was tor bank balances. The major part ot this amount is invested short-term in the principal currencies tor our business activity and is used to meet current obli­ gations on time.
Ot the total amount ot current-account balances ot Sw.trs. 1,205.3 million, Sw.trs. 992.7 million was tor reinsurance and Sw.trs. 172.6 million tor retrocession business; Sw.trs. 40.0 million concerned other balances, the most significant part ot which comprised reclaimed taxes. The overall increase over the previous year was Sw.trs. 167.4 million.
Cash deposits tor retrocessions showed only a slight change at Sw.trs. 109.5 million.
The portfolio ot capital market investments (fixed-interest securities, loans and shares) and real estate rose by Sw. trs. 720.7 million to Sw. trs. 5,420.7 million. The valua­ tion difference on capital market investments (excluding loans), i.e. the difference between the lower book and higher market value ot the individual securities, taking into account the estimated value ot taxes due on realiza­ tion, amounted to Sw.trs. 588.8 million (previous year, Sw.trs. 627.2 million) or14.4% (previous year, 18.1%) otthe balance-sheet value ot securities.
Business in force at end of previous year Non-Life reinsurance 4,873.9 4,771.4 Life reinsurance 1,321.4 1,369.2 Total for own account 6,195.3 6,140.6
Non-Life Reinsurance Unearned premiums 1,298.7 1,194.9 Outstanding claims reserve (incl. valuation of current annuity indemnities) 4,345.0 3,679.0 5,643.7 4,873.9 in % of earned net premiums 181.4% 173.3%
In addition, on 31st December, 1984, there was an author­ ized non-voting share capital of Sw.frs. 5 million (100,000 non-voting shares with a nominal value of Sw.frs. 50.-).
At the end of the previous year they amounted to Sw. frs. 659.7 million which would rise to Sw.frs. 795.8 million by the proposed allocation of the profit, provided it is ap­ proved by the General Meeting of Shareholders. The capital funds would then be composed as follows: in millions of Swiss francs
Contingent liabilities (sureties and contingent obliga­ tions to liberate not fully paid up shares) amounted to Sw.frs. 86,684,898 per 31st December, 1984.
After deduction of the Federal Withholding Tax of 35%, the dividends of Sw.frs. 74.75 and Sw.frs. 14.95 respectively will be paid after 26th November, 1985, as follows: Registered shares: by means of dividend order to the shareholders In the re­ cords of the share register or to their deposit banks.
For the Board of Directors: W. Diehl, Chairman C. Blanc, Secretary
R Bachmann H. U. Giezendanner Swiss Certified Accountant Swiss Certified Accountant
Laser coagulation Lasers enable the welding of detached retina and are finding increasing use in medicine and surgery.
There have been three changes in the holding structure within the Swiss Re Group: In the year under report, the Salus Krankenhauskosten-Versicherungs-AG, Munich, belonging to the Vereinigte Versicherungsgruppe merged with the Vereinigte Krankenversicherung AG, Munich, in the current year the Swiss Re acquired a small Non-Life insurance company in the United States named North American Speciaity insurance Company, Cieveiand, Ohio, in addition, the SWITZERLAND General insur­ ance Company took over a majority holding in the Financiera Nacionalde Seguros y Reaseguros C.A.E. (Finasyr), Barcelona, as a subsidiary company in Spain.
Most majorforeign currencies, foremost among them the U.S. dollar, were valued higher against the Swiss franc at the end of 1984. Foreign currency developments not only boosted premium growth considerably during the year under report but also affected to no insignificant extent most items of the consolidated Profit and Loss Account and the Balance Sheet.
In Life reinsurance profitability improved. With a net amount of business in force of Sw.frs. 175,000 million (previous year, Sw.frs. 159,000 million), an underwriting profit was produced of Sw.frs. 68 million (previous year, Sw.frs. 49 million).
The European General Reinsurance Company of Zurich increased the gross premium volume In Non-Life reinsur­ ance by 28.3% from Sw.frs. 409.9 million to Sw.frs. 526.1 million. Approximately half of this growth was due to the higher exchange rate of the U.S. dollar. The underwriting result deteriorated further. - In Life reinsurance the gross amount of business in force totalled Sw. frs. 88,800 million (previous year, Sw. frs. 62,600 million). A high claims bur­ den and reinforcements for policy reserves relating to earlier years led to a negative result. Thanks to higher investment income and an increase of realized capital gains, the net profit Improved to Sw.frs. 2.0 million (previ­ ous year, Sw.frs. 0.9 million). As in the previous year, this profit is to be used to strengthen the reserves.
Because of remedial measures in Liability business the gross premiums of the Canadian Reinsurance Company, Toronto, fell to Gan.$ 115.7 million (previous year, Gan.$ 148.1 million). Flowever, the underwriting loss showed a considerable reduction. The investment result was as good as that of fhe previous year. Gverall the company earned a profit of Gan.$ 4.5 million (previous year, loss of Can.$ 1.9 million) and paid an unchanged dividend of Can.$ 0.8 million on its preference shares.
Fire 1,902 402 2,304 1,769 382 2,151 Accident/Sickness 985 1,928 2,913 614 1,738 2,352 Third Party Llablllty/Motor 1,448 714 2,162 1,276 666 1,942 Marine 356 119 475 347 110 457 Other branches 1,085 174 1,259 877 157 1,034 Life 1,901 518 2,419 1,725 490 2,215 Gross premiums 7,677 3,855 11,532 6,608 3,543 10,151 Premiums ceded 1,125 592 1,717 720 537 1,257 Net premiums 6,552 3,263 9,815 5,888 3,006 8,894
Following remedial measures at the Swiss-South African Reinsurance Company Limited, Johannesburg, gross premiums in Non-Life reinsurance fell by 8.8% to Rand 79.5 million. In part still inadequate premium rates, vari­ ous natural catastrophes and a strengthening of claims reserves led to an increase of the underwriting loss. - In Life reinsurance the gross amount of business in force rose to Rand 6,300 million, although the underwriting re­ sult declined following late reported claims in associated Accident and Sickness business. - Despite a 5% in­ crease in investment income, an overall loss remained of Rand 0.4 million (previous year, profit of Rand 4.5 million). No dividend was paid.
The gross premiums in the Non-Life sector of the Austraiian Reinsurance Company Limited, Meibourne, rose by 11.5% to Austr.$ 81.5 million. It was possible to reduce further the underwriting loss. - In Life reinsurance the gross amount of business in force remained practically unchanged (Austr.$ 2,500 million), although the under­ writing result (including Accident and Sickness reinsur­ ance) worsened because of a higher claims burden. The further increase in investment income and the better result in Non-Life reinsurance led to a higher overall profit of Austr.$ 4.3 million (previous year, Austr.$ 2.6 million). The dividend was raised from Austr.$ 0.7 million to Austr.$ 0.75 million.
The consolidated net premiums rose in the year under report by 8.5% to Sw.frs. 3,263 million (previous year, Sw. frs. 3,006 million). Approximately 86% of this premium volume is produced by the German insurance compa­ nies. The substantial improvement of the underwriting result registered in the previous year did not - viewed overall - continue in the year under report. In Non-Life in­ surance of the German companies the Munich hailstorm prevented a further improvement of the result. In Sick­ ness insurance claims payments increased. Thanks to substantially higher investment income, a positive bal­ ance from realized capital gains and write-offs as well as a lower tax burden, the Group profit from insurance com­ panies reached Sw.frs. 29 million (previous year, Sw.frs. 22 million).
The growth of the SWiTZERLAND Generai insurance Company Limited, Zurich, was gratifying. The published gross premiums rose to Sw.frs. 656.0 million (previous year, Sw.frs. 532.2 million). In insurance the premium growth was over 30%, in reinsurance about10%. Ofthese figures 3.5% in insurance and 5.2% in reinsurance were due to the effect of exchange rates. The underwriting re­ sult corresponded to that of the previous year. The invest­ ment income could again be increased. The profit shown increased to Sw.frs. 7.2 million (previous year, Sw.frs. 5.2 million). This enabled the payment of a higher dividend of Sw.frs. 2.0 million (previous year, Sw.frs. 1.13 million).
The consolidated gross premiums of the Magdeburger Versicherungsgruppe, Hanover, rose by 4.0% to DM 874.5 million. The gross premiums of the Magdeburger Feuerversicherungs-AG increased by 3.6% to DM 643.3 million (previous year, DM 620.9 million). The underwrit­ ing result produced a loss. Together with the higher in­ vestment income, it was possible to achieve a profit for the year of DM 5.1 million (previous year, DM 7.7 million). Of this amount, DM 3.6 million was paid out as a dividend (previous year, DM 7.7 million, including special dividend, taxed at a lower rate, which was returned to the company for a share capital increase). - The amount of business in force of the Magdeburger Aligemeine Lebens- und Rentenversicherungs -AG rose by 7.9% to DM 5,570 million (previous year, DM 5,160 million). Insurance claims rose slightly. Overall, the result was unchanged, a substantial contribution having been made by the increased invest­ ment income. After direct credits and an allocation to the reserve for policyholders' bonuses, a profit for the year of DM 0.6 million (previous year, DM 0.5 million) remained which was used to make a contribution to the paid-up capital as well as to pay an unchanged dividend of DM 0.3 million.
The fifth business year of the mh Bausparkasse AG, Mu­ nich, founded in 1979, was very satisfactory. Net new bu­ siness produced savings contracts of DM 888 million (-1-41.2%). At the end of the year the mh Bausparkasse AG had a portfolio of savings contracts of DM 2,324 million, corresponding to a growth of approximately 52% over the previous year. The year's profit of DM 0.1 million was allo­ cated to the reserves.
Underwriting result from Non-Lite Insurance - 530 2 - 528 - 368
Taxes Group company profit applicable to minority sfiarefiolders * The figures in this column do not always amount to the total of the figures In the two preceding columns as figures for holdings and other companies are also included.
Current-account balances 999 663 1,670 1,691 Casfi deposits 397 271 668 772
The scope of consolidation includes ail domestic and for­ eign companies in which Swiss Re, Zurich, directly or in­ directly maintains a holding of more than 50%. Each indi­ vidual item of fhe profit and loss accounts and the bal­ ance sheets of these companies is shown at 100%. The shares of the capital funds and profit applicable to minor­ ity shareholders are shown as separate items in the con­ solidated balance sheet and profit and loss account.
As in previous years, advisory and service companies are not consolidated in view of their insignificant effect on the Group's funds and income. The only exception is the mh Bausparkasse AG in iviunich.
verted into Swiss francs using the average foreign cur­ rency rates as at 31st December, 1984.
In the published annual accounts In local currencies of the individual Group companies capital Investments are valued in accordance with local accounting regulations. These regulations vary from country to country. For the consolidation, however, uniform valuation rules are ap­ plied.
All other Items of the Group balance sheet play a subor­ dinate role in the valuation. Foreseeable risks of loss are taken into consideration by means of value adjustments by the individual Group companies.
Investment Income also Includes dividend payments of non-consolidated holdings in the amount of Sw.frs. 22 million (previous year, Sw.frs. 20 million).
The consolidated gross premiums of the entire Group in all classes rose by Sw.frs. 1,381 million to Sw.frs. 11,532 million. The effect of higher foreign currency rates is re­ sponsible for 7.7% (previous year, 1.6% negative) of the pronounced increase of 13.6% In the gross volume. In Non-Life insurance the premium income rose by 14.8% (previous year, 1.4%) to Sw.frs. 9,113 million, in Life insur­ ance by 9.2% to Sw.frs. 2,419 million (previous year,fall of 0.9%).
These items comprise a positive balance from realized capital gains and depreciation on investments of Sw.frs. 238 million (previous year, Sw.frs. 167 million), from foreign currency losses of Sw.frs. 23 million (previous year, Sw. frs. 11 million) as well as from value adjustments and depreciation on assets outside the investment sphere of Sw.frs. 49 million (previous year, Sw.frs. 52 million).
The valuation difference on fixed-interest investments and shares, i.e. the difference between the lower book and higher market value of the individual securities, tak­ ing into account the estimated value of taxes due on real­ ization, amounted to Sw.frs. 1,156 million or 6.7% of the balance-sheet value (previous year, 7.7%).
These items correspond to the capital funds at book value of the Swiss Re, Zurich, as parent company. The reserves shown comprise the statutory reserve fund, the special reserve fund, the reserve fund for catastrophe losses as well as the profit carried forward from the previ­ ous year.
The consolidation reserve fund results from the differ­ ence between the capital funds shown of Group com­ panies and the corresponding book values applied by SwissRe Holding Limited and Swiss Re, Zurich. Mostly higher conversion rates on the one hand and the strengthened internal financing of various Group com­ panies on the other brought about an increase of the con­ solidation reserve fund by Sw.frs. 91 million to Sw.frs. 297 million (previous year, increase of Sw.frs. 21 million).
Holding and Other Companies mh Bausparkasse AG DM 60.1 10,005 297,473 -
SwissRe Holding (North America) Inc. US $ 100 173,091 230,585 -
Investment and otfner financial income Management and otfier expenses Rate fluctuations, depreciation, value adjustments Result from general income and outgo Taxes Sfiare of profit applicable to minority sfiarefiolders Group Profit
Switzerland Swiss Reinsurance Company Mythenquai 50/60, CH-8022 Zurich with branch offices in Melbourne, New York and Toronto European General Reinsurance Company of Zurich Mythenquai 50/60, CH-8022 Zurich with a branch office in Madrid
United States North American Reassurance Company 100 East 46th Street, New York, NY 10017 with branch offices in Dallas, Lakewood (CC) and Schaumburg (IL) Swiss-Am Reassurance Company 100 East 46th Street, New York, NY 10017 SwissRe Life Insurance Company 100 East 46th Street, New York, NY 10017 North American Reinsurance Corporation 100 East 46th Street, New York, NY 10017 with branch offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, Philadelphia and San Francisco
Canada Canadian Reassurance Company 95 St. Clair Avenue West, Toronto, Cntario M4V1N6 with a branch office in Montreal Canadian Reinsurance Company 95 St. Clair Avenue West, Toronto, Ontario M4V1N9 with branch offices in Montreal and Vancouver
SWITZERLAND General Insurance Company Limited Gotthardstrasse 43, CH-8022 Zurich with branch offices in Barcelona, Brussels, Hamburg, Milan, Paris, Vienna, Hong Kong, Manila, Melbourne and Montreal SWITZERLAND General Insurance Company (London) Limited Three Quays, Tower Hill, London, EC3R6DS Financiera Nacional de Seguros y Reaseguros Q.A.E. (Finasyr), Via Augusta 153-157, 08021 Barcelona
United States SwissRe Corporation 100 East 46th Street, New York, NY 10017 SwissRe Advisers, inc. 100 East 46th Street, New York, NY10017 Atrium Corporation 100 East 46th Street, New York, NY10017 Surety Support Services, Inc. Suite 426 1211 West 22 Street, Oak Brook, IL 60521
Philippines SwissRe Advisers Limited Doha Narcisa Building, Room 703, 8751 Paseo de Roxas, Makati, Metro Manila
Singapore SwissRe Advisers (Singapore) Pte. Ltd. 24 Raffles Place No. 25-06A, Clifford Centre, Singapore 0104
United States SwissRe Holding (North America) Inc. 100 East 46th Street, New York, NY10017
Colombia Compahia Suiza de Reaseguros, Oficina de Asesoria Tecnica Carrera 13, No. 38-29, Piso 6, Bogota
Annuity: Contract under which the benefits consist of a regular income payment for a specified period of time (of. death and maturity benefits).
Cash deposits: A sum left by the ->• reinsurer in the hands of the ceding company to guarantee contractual liabilities.
Claims incurred: All claims payments plus the adjust­ ment in the -> outstanding claims reserve of a business year.
Co-insurance: Where a number of ^ insurers and/or -> reinsurers each share part of a ^ risk.
Commission: Remuneration paid to the ̂ insurer, to -> brokers or other commercial intermediaries for their costs in connection with the acquisition and administration of insurance business.
Earned premium: Premium applicable fo the expired part of a reinsurance period continuing afterthe balancesheet date.
Engineering insurance: Insurance of construction and erection objects during the construction or erection pe­ riod and the insurance of machinery in operating plants (incl. EDP installations).
Incurred but not reported losses (IBNR): Provision for losses which have occurred but which have not yet been reported to the ^ insurer or ^ reinsurer on the balancesheet date.
Life reinsurance in force: All reinsured Life business in tfie portfolio of tfie ^ reinsurer.
Marine insurance: Insurance against damage or loss of stiips and cargoes; also includes off-stiore drilling plat­ forms and oil rigs.
Non-proportional reinsurance: Form of insurance in which the reinsurer decides on the amount he is willing to retain for his own account and buys reinsurance, at a specially calculated premium, for those loss amounts which exceed the retention.
Portfolio: The totality of ^ risks assumed by an or reinsurer; also the totality of investments.
Surrender: (Surrender value): In ^ Life insurance pay­ ment to the insured (or assessment) of the cash value of an insurance policy before the policy has run its course (in general after deduction of the non-amortized costs of the insurer).
Treaty reinsurance: The participation of the reinsurer in certain sections of the ̂ insurer's business as agreed by treaty (cf. facultative reinsurance).
Quota share reinsurance: Form of ^ proportional rein­ surance providing that the ^ reinsurer accepts a speci­ fied share of each ̂ risk of an ̂ insurer in a specific class of business.