Swiss Reinsurance Company Mythenquai 50/60, P.O.Box, CH-8022 Zurich, Switzerland Telephone 01 208 2121 Telex 59261 reas oh Cables swissre
Proposal of the Board of Directors 26 1 Auditors' Report 27
Board of Directors Term to expire in Walter Diefil* Chairman, Zuricfi 1983
E. Luk Keller Erlenbacfi, Cfiairman and Managing Director of Eduard Keller Ltd., Zuricfi 1985
Hans R. Lüthy* Küsnacfit, Cfiairman and Managing Director of IBM (Switzerland), Zürich 1985
Franz Luterbachier Zumikon, Chairman of the Board of Directors of BBC, Brown, Boveri & Co., Ltd., Baden 1985
Marcel Odier Cologny, Partner in Lombard, Cdier & Cie, Bankers, Geneva 1984
Hans Ulricfi St. Gall, Professor, St. Gall Graduate School of Economics, Business and Public Administration 1985 * Members of the Committee of Directors
General Managers Paul E. Cfiristen Paul-Francis Niquille Hermann Odermatt Herbert Schönenberger
German-speaking Switzerland, Ger­ many, Austria, Netherlands, Denmark, Sweden, Norway, Finland, Iceland K.Aerni, Senior Executive Manager M, Nabholz, Executive Manager E. Etter, Executive Manager W. Müller, Executive Manager W. Rüetscfri, Executive Manager B. Heyer, Manager U. Winter, Manager
French- and Italian-speaking Switzerland, France, Italy, Spain, Belgium, Luxembourg, Greece, French-speaking Africa G.Lavanctiy, Senior Executive Manager E.Jutzi, Executive Manager R.Martignier, Executive Manager S. Patthey, Executive Manager R. ROttimann, Executive Manager A.Galfetti, Manager M.-L. Musy, Manager J.Steinrisser, Manager
Portugal, Eastern Europe, Near, Middle and Far East, Latin America, Caribbean, English-speaking Africa P.-G. Perrenoud, Senior Executive Manager P.Würscti, Executive Manager G. Bachmann, Executive Manager P. Ehrsam, Executive Manager G. Holzel, Executive Manager P. Bieri, Manager G. Haering, Manager L.T.Pozzi, Manager R. Siegrist, Manager H.Stettler, Manager R.P.Brouwer, Member of Management H.H.Zollinger, Member of Management H.Haag, Member of Management R. Maag, Member of Management F. J. Wingrove, Member of Management
Reinsurance technique, acquisition, special risks. Insurance medicine R.Hedlnger, Senior Executive Manager J.-C. Mayor, Executive Manager E. Deico, Executive Manager R. Eckert, Executive Manager L. D.Kirianoff, Executive Manager F.Lock, Executive Manager H.G. Rutishauser, Executive Manager P. Strickler, Executive Manager S.Gourant, Manager E. HIrzel, Manager H. W. Kreis, Manager K.Küstahler, Manager A.Loye, Manager S.Menn, Manager F. Pfenninger, Manager F.Schulthess (Ms.), Manager J.-P. Vogel, Manager K. Wettenschwiler, Manager M.LHeftl, Member of Management J. Doktor, Member of Management B.R. Lacock, Member of Management A. Perret, Member of Management
Reinsurance technique and acquisition special lines J.G. Roos, Senior Executive Manager H.R.Kaufmann, Executive Manager
The titles in this chart are those used by Swiss Re, Zurich, worldwide excluding North America and certain other territories for which the corresponding hierarchical titles are as follows; General Manager
Member of the Executive Gommittee and Group Management Group Vice President Senior Vice President Vice President
W. Isler, Senior Executive Manager W. Sctiiegg, Executive Manager R. Jeck, Manager G.Schmidli, Manager
Personnel service, training E. E.Arpagaus, Senior Executive Manager R. Oberle, Manager J. Niederer, Manager Fl.Spörri, Manager
In Life reinsurance business it was again possible to achieve a gratifying profit.
The profit from the overseas territories handled from the Head Office was slightly less than that of 1981, but can still be called satisfactory. Unfortunately, there has been a considerable increase in overdue balances from reinsur­ ance operations, particularly from Africa. The significance of international reinsurance for the industries which have been built up in recent years in developing countries has not yet been acknowledged everywhere. In the event of foreign exchange difficulties demands for payment under reinsurance treaties are, therefore, often placed in the lowest priority categories. Contacts with the competent local authorities are intended to help make them sympa­ thetic towards the need for as few restrictions as possible In the transfer of payments In reinsurance. Some partial successes have already been achieved.
During the year under report the European business of Swiss Re, Zurich, grew somewhat more than overseas business. Despite another very attractive Life result, it closed with a considerably higher loss than In the previ­ ous year, almost exclusively as a result of the storm losses In France in November, 1982.
In the year under report the gross premiums from ali branches totalled Sw.frs. 3,917 million (previous year, Sw.frs. 3,701 million); of this total Sw.frs. 884 million (pre­ vious year, Sw.frs. 822 million) was retroceded, leaving the Company with net premiums amounting to Sw.frs. 3,033 million (previous year, Sw.frs. 2,879 million).
The gross premium income from Non-Life reinsurance, when expressed in Swiss francs, rose by Sw.frs. 188 mil­ lion, or 5.6%, over the previous year to Sw.frs. 3,520 mil­ lion. Taken as a whole, foreign currency rate fluctuations had only a marginal effect on the premium volume al­ though certain major currencies experienced a substan­ tial re- or devaluation against the Swiss franc by the end of the reporting year. The modest growth rate reflects the difficult situation of the insurance markets and our inten­ sive efforts to improve the conditions for existing busi­ ness and to be very selective in accepting new business. In the year under report our continued remedial efforts still did not meet with the success hoped for, and the un­ derwriting loss in Non-Life reinsurance rose from Sw.frs. 93.9 million in the previous year to Sw.frs. 197.3 million. A storm loss of catastrophic proportions in France, but more particularly the persistence of the Inadequate premium level In the major branches of direct insurance, were responsible for this significant worsening.
a considerable loss In the year under report. The Novem­ ber storms In France will call for claims payments of approximately Sw.frs. 50 million. Oversupply In Insur­ ance and reinsurance, which has existed for years, Is par­ ticularly pronounced In this branch, and brought about underwriting losses In numerous markets of Importance to the Swiss Re. If the premium rates for Industrial Fire Insurances are not raised In the near future, we do not exclude the possibility that there will be a swing from the prevailing glut to a genuine cover shortage. At the mo­ ment the reinsurance premiums In many markets are hardly sufficient to cover the growing number of mediumsized losses, so that there Is no premium substance left for major losses.
In Sickness reinsurance the premium volume Increased for the first time In a long while. The result Is slightly ad­ verse because of the rising costs of medical care.
In Burglary, Fidelity and allied lines the loss was approxi­ mately double that of the previous year. Premium in-
After an interruption In the previous year, growth In Gen­ eral Third Party Liability reinsurance resumed. The higher
The staff of the Accidenf/Liabilify division of the Non-Life Reinsurance deparfmenf examines in particular risks from the fields of Industrial, Commercial, Products, Environ­ mental Impairment and Professional Liability as well as major accumulation risks in Accident insurance. The Claims Service performs services worldwide for insurance companies in connection with complicated Liability claims. Mathematicians and other specialists calculate the premium rates for non-proportional treaty reinsurance.
3 Risks from installation work on behalf of third parties come under Erection Liability.
Stemming as it does from countries whose currencies hardened against the Swiss franc in fhe year under reporf, the increase of the premium volume in Motor rein­ surance is due to fluctuations in foreign exchange rates. The loss is about the same as in the previous year. The business from certain important European countries, par­ ticularly those with pronounced claims inflation, contin­ ued to be negative.
Fire 1,155 1,149 Hail 29 24 Burglary, Fidelity and allied lines 91 81
Accident 370 310 Sickness 98 81 General Third Party Liability 314 294
Ttie net amount ot new business tor 1982 totalled Sw.trs. 10,186 million, 3.0% less ttian in ttie previous year as a consequence ot foreign-currency rate fluctuations, various corrective measures and several substantial re­ tention increases by ceding companies. Ttie net amount ot business in force at ttie end otttie year rose by 7.1% to Sw.trs.44,715 million. It exctiange rates tiad remained stable, new business would tiave risen by 16% and busi­ ness in force by 17%.
1 Direct access to the main frame computer is a prerequisite for the daily work of reinsurance specialists, marketing staff and financial and EDP experts.
3 Word processors simplify and accelerate the typing of letters and other documents. They are also used for translation and recording minutes.
4, 5 Micro and personal computers (some with additional units) enable specialists to solve individual tasks.
6 Telexes are transmitted fully automatically by direct input via decentralized terminals and by means of a telex computer.
In the year under report the decline in interest rates \which had already begun in the autumn of 1981 on all major in­ vestment markets continued, slowly at first but accelerat­ ing in the second half of the year. All the same the world economic situation worsened even more with a mutual intensification of consumer restraint and the lack of readi­ ness to invest on the part of corporations. At the same time the problems of international indebtedness came to a dangerous peak and the tendency grew toward open or concealed protectionist measures. As a result, world trade and the volume of international credits shrunk for the first time in many years.
The expectation of lower inflation, falling demand for credit and a somewhat eased monetary policy led, at first in North America and then in other investment countries, to falling yields on the bond markets. The consequent price increases caused considerable growth in the mar­ ket value of our bond portfolio. Even though a substantial part of the hidden surplus which this prompts will disap­ pear in the coming years through contracting maturities, the new investments in recent years still secure a gratifyingly increased current yield.
Holdings and loans comprise the actual holdings of Sw.frs. 33 million (previous year, Sw.frs. 27 million) and the loans to Group companies of Sw.frs. 454 million (pre­ vious year, Sw. frs. 469 million). Overall these investments fell by Sw.frs. 9 million to Sw.frs. 487 million, largely as a result of the reduction of the loan to SwissRe Holding.
The labour market situation made recruiting personnel somewhat easier, and it was possible to examine more applications than in the previous year. However, there is still a lack ot well qualified, commercially trained junior statt as they have at their disposal a wide variety ot job possibilities in the currently expanding services sector.
Personnel statistics reveal an average ot 12 years ot ser­ vice and an average age ot 41. A third ot Swiss Re statt are female. The Swiss Re employs 130 foreigners from 30 countries. Over halt otthe employees have had commer­ cial training. Approximately 20% are university grad­ uates. 29% ot statt are in a managerial position.
In the Swiss Re Group, the total number ot employees rose by 1.3% to 13,667 (ct. table comparing the business years 1974/75-1982 on pages 48 and 49).
The main emphasis is on on-the-job training. Neverthe­ less, the training concept also includes technical, lan­ guage, behavioural and management training. During the year under report some 600 employees attended internal training courses. In addition, members ot statt are selec­ tively delegated to external courses.
The Swiss Re's range ot training programmes tor clients from all over the world was again extended. Non-Lite rein­ surance seminars give instruction on the practical appli­ cation ot reinsurance techniques; cases studies in the form ot a computer dialogue are used tor practice pur­ poses. Other courses and seminars impart correspond­ ing knowledge in Lite insurance and reinsurance. Courses and seminars are organized tor individual clients but also tor larger groups ot participants. Docu­ mentation and manuals complement the training ottered.
In September 1983 the 400,000 registered shares were owned by approximately 15,700 shareholders (previous year 16,000), of which 14,500 were natural persons and 1,200 legal entities. The ratio of the total ownership of these two categories of shareholders remained un­ changed at 70% to 30%. Approximately 98% of the regis­ tered shareholders were of Swiss nationality. They owned over 92% of the registered share capital.
During the 1982 business year an average of 3,840 regis­ tered shares were traded per month (previous year, ap-
In the 1982 business year the Swiss Re made donations totalling Sw.frs. 585,000; approx. half of all donations were for general charities and welfare (Sw.frs. 164,000) and for training and research (Sw.frs. 130,000). Other main emphases were domestic and foreign development aid (Sw.frs.98,000), cultural aid/environmental protec­ tion (Sw.frs.96,000) and humanitarian aid (Sw. frs. 60,000).
Last year's General Meeting confirmed thie re-eiection of Mr. Helmut F. Rudolf for a further four-year term of office and, in view of the prevailing age limit, the re-election of Mr. Edwin Stopper for a further two years.
At this year's General Meeting the term of office of Mr. Walter Diehl expires; he is standing for re-election.
Having reached retirement age, Mr. Hans Brodbeck, Senior Executive Manager, Messrs. Roger Aeberii and Peter Schuppli, Executive Managers, and Mr. Pierre Darioli, Manager, retired on 31st December, 1982. All four gentlemen have rendered our Company great services for decades and we should like to express our sincere gratitude to them.
Casti in tiand, postal bank account, bank balances Current-account balances Gasti deposits
All items of the Balance Sheet and Profit and Loss Ac­ count in foreign currencies were uniformly converted into Swiss francs using the average foreign currency rates as at 31st December, 1982. The currencies which are most important for our business activity abroad developed over the previous year as follows; Liabilities
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 cash values. The technical reserves of Life reinsurance business are de­ termined on the basis approved by the Swiss Federal Council.
Dutch guilder 75.90 72.80 4.3-F U.S. dollar 200.- 180.- 11.1 -F Canadian dollar 162.— 152.- 6.6-F Yen 0.855 0.82 4.3-F Rand 186.- 188.- 1.1 - * rates in Swiss francs for 100 units of currency
Cash in hand and credit balances are entered in the Bal­ ance Sheet at nominal amounts. This also applies to standard loans and to mortgages.
Securities and holdings are in principle entered at acqui­ sition price or, if the stock exchange price is lower on the balance-sheet date, at the lower value. Non-quoted hold­ ings are, where necessary, entered at the lower intrinsic value. The lower valuation is retained until disposal of the corresponding securities.
Gross premiums in the year under report totalled Sw.frs. 3,519.9 million, as against Sw.frs. 3,332.4 million in the previous year. After deduction of retrocession premiums, the net premiums amounted to Sw.frs. 2,655.0 million, an increase of 4.9% over 1981.
Claims comprise benefits for term and endowment insur­ ance, annuities and the adjustment in the outstanding claims reserve. The total figure for own account rose in the year under report by Sw.frs. 14.2 million to Sw.frs. 198.0 million. The additional amount resulted from an in­ crease of Sw. frs. 8.7 million in the payments for Life insur­ ance and annuities and one of Sw.frs. 5.5 million in the outstanding claims reserve.
These result from the total of the net premiums and the difference in the unearned premium reserve over the last reporting year. At Sw. frs. 2,625.7 million they were Sw. frs. 156.1 million, or 6.3% above the previous year's amount.
The commissions and profit commissions calculated for business assumed totalled Sw.frs. 80.2 million. The retro­ cessionaires' share of this amount was Sw. trs. 1.5 million, so that Sw.frs. 78.7 million remained for own account.
As a result of difficulties in the payment transactions of a growing number of countries the balances outstanding there grew markedly during the year under report. The consequent risk of loss was taken into account by means of general and individual value adjustments. Overall the outgo for the necessary adjustment amounted to Sw. frs. 24.7 million (previous year, Sw.frs. 4 million).
Of these balances Sw.frs. 538.6 million was for reinsur­ ance and Sw.frs. 45.7 million for retrocession business. Other liabilities totalled Sw.frs. 68.6 million, mainly com­ prising current accounts run for personal welfare funds and subsidiary companies.
Cash deposits for retrocessions fell compared to the pre­ vious year by Sw.frs. 9.4 million to Sw.frs. 127.5 million.
Cash deposits with ceding companies rose over the pre­ vious year by Sw.frs.48.7 millionte Sw.frs. 1,497.1 million, which was largely due to the greater volume of business.
Moreover there is an authorized non-voting share capital of Sw.trs. 10 million (200,000 non-voting shares with a nominal value of Sw.trs. 50.-).
Business in force at end of year Non-Life reinsurance 4,280.0 4,143.9 Life reinsurance 1,330.5 1,365.2 Total for own account 5,610.5 5,509.1
Non-Life reinsurance Unearned premiums Outstanding claims reserve (incl. valuation of current annuity indemnities)
Life reinsurance Policy reserves 1,188.9 1,174.9 Outstanding claims reserve 180.3 155.6 in % of insurance in force, net 3.1 % 3.2%
Share capital 111.0 111.0 Non-voting share capital 12.0 12.0 Reserves and profit carried forward 501.9 467.1 Total 624.9 590.1
roposal of the Board of Directors proposal regarding allocation of the net profit of. Profit and Loss Account (page 20) and Balance Sheet (page 21)
We have come to the conclusion that the Balance Sheet and the Profit and Loss Account are in agreement with the books, the books of account have been properly kept, the financial position and the results of operations are presented in accordance with the principles of evaluation prescribed by the law and the requirements of the Articles of Association.
Casfi in tiand, postal bank account, bank balances Current-account balances Gasti deposits
'Audatex Deutschland Datenverarbeitungs-GmbH, Minden mh Bausparkasse AG, Munich * not consolidated
Consolidated net premiums rose in the year under report by 7.4% (previous year, 7.8%) from Sw.frs. 8,137 million to Sw.frs. 8,740 million, in Life insurance the positive result improved. In contrast, the loss in Non-Life insurance in­ creased greatly, reflecting the continuing worldwide dete­ rioration in this field. Overall underwriting business pro­ duced a loss of Sw.frs. 246 million (previous year, loss of Sw.frs.80 million). The growth of the investment volume and a generally still high interest rate level brought about a noticeable increase of investment income by Sw. frs. 115 million (previous year, Sw.frs.78 million). Reduced write­ offs and higher realized capital gains on securities contri­ buted on balance a profit of Sw.frs.46 million (previous year, surplus of write-offs of Sw.frs.81 million). On the other hand, the outgo for management expenses and taxes increased. Overall the remaining Group profit of Sw.frs. 97 million was Sw.frs. 15 million higher than in the previous year. The Group's capital funds shown, includ­ ing Group profit, amounted at the end of 1982 to Sw.frs.872 million (previous year, Sw.frs.801 million).
In Life reinsurance the result Improved, thanks above all to the good results of the U.S. subsidiary companies. With a net amount of business in force of Sw.frs. 123,000 mil­ lion (excluding the special covers granted by these com­
panies), the underwriting profit was Sw.frs.60 million (previous year, Sw.frs.39 million).
With interest rates in our major markets still high, invest­ ment income rose by Sw.frs. 98 million to Sw.frs.654 million. The stimulation of the stock exchange markets In the second half of the year brought about a reduction of the need for write-offs on securities and caused an In­ crease of realized capital gains. Management expenses and taxes had a greater burdening effect on the profit and loss account than in the previous year. Nevertheless, the consolidated Group profit of the reinsurance companies rose to Sw. frs. 77 million (previous year, Sw. frs. 64 million).
The gross premiums of the Canadian Reinsurance Com­ pany, Toronto, rose to Can. $ 149.0 million (previous year, Gan.$ 137.1 million). The underwriting loss exceeded slightly that of the previous year. This deterioration was mainly due to unsatisfactory experience in Liability busi­ ness. However, the increase of Invested funds brought a growth of the investment result. For the business year the loss of Can. $ 0.1 million was therefore Can. $ 1.2 million less than in the previous year. The company paid a divi­ dend of Can. $ 0.8 million (previous year, no dividend) for its preference shares.
The North American Reassurance Company, New York, the SwissRe Life Insurance Company, New York, and the Swiss-Am Reassurance Company, New York, are man-
aged as one unit in terms of organization and personnel. In the year under report the Life reinsurance business in force of these companies increased gratifyingly, not tak­ ing into account the special reinsurance covers already mentioned In the previous year. The underwriting profit also rose. The rise in investment income and capital gains was contrasted with higher management ex­ penses. The overall result amounted to US$ 10.8 million (previous year, US$ 5.4 million). The dividend paid was US$ 0.8 million as in the previous year.
At the Bavarian Reinsurance Company Limited, Munich, gross premiums rose in Non-Life reinsurance to DM1,370 million (previous year, DM 1,343 million).The underwriting loss was higher than In the previous year. In Life reinsur­ ance the gross amount of business in force rose to DM 3,700 million (previous year, DM 3,400 million) with a pos­ itive underwriting result. A further Increase in investment income and the fact that the previous year's foreign cur­ rency losses were not repeated led to an unchanged an­ nual profit of DM 6 million. A dividend payment of DM 3.0 million (previous year, 2.0 million) is expected.
At the Swiss Reinsurance Company (UK) Limited, Lon­ don, and the Palatine Insurance Company Limited, Lon­ don, gross premiums in the Non-Life sector increased only marginally by 1.4% to £ 72.8 million. As a result of a further deterioration across all major lines of business the underwriting loss rose considerably. In contrast, the gross amount of Life business in force increased to £1,700 million with at the same time an improvement of the underwriting result. Although the investment result was gratifying, there was still an overall loss of £ 0.5 mil­ lion (previous year, profit of £0.5 million). No dividend was paid for the year (previous year, £115,500).
At the Swiss-South African Reinsurance Company Lim­ ited, Johannesburg, gross premiums in Non-Life insur­ ance rose by 17% to Rand 83.0 million. The increased un­ derwriting loss reflects the unsatisfactory premium rates of insurers, particularly for large industrial risks. In Life reinsurance the gross amount of business in force (in­ cluding Sickness and Disability business) was increased by Rand 1,300 million to Rand 5,700 million, with a reduc­ tion of the underwriting loss. As a consequence of the very good Investment Income and the realized capital gains It was possible to keep the net profit practically un­ changed at Rand 1.5 million (previous year. Rand 1.6 mil­ lion). For the year under report, a dividend of Rand 1.25 million was paid (previous year. Rand 1.0 million).
The Australian Reinsurance Company Limited, Mel­ bourne, registered overall a premium growth rate of 8%. The premium volume on Non-Life business rose to Austr. $ 61.0 million (previous year, Austr.$ 56.4 million). It was possible to reduce the underwriting loss. The gross amount of Life reinsurance in force rose by 21% to Austr. $ 2,000 million while the underwriting result, because of un­ favourable claims experience, was just balanced. A con-
siderable increase of Investment income and of realized capital gains produced an improved net profit of Austr.$ 2.5 million (previous year, Austr. $ 0.7 million). An unchianged dividend of Austr. $ 0.6 million was paid.
Tfie consolidated net premiums rose in tfie year under re­ port by 11.8% to Sw.frs. 2,945 million (previous year, Sw.frs. 2,634 million). The German Group insurance companies produced 88% of this premium volume. Over­ all the underwriting result has again worsened as a result of the unsatisfactory German and Swiss business in NonLife insurance. Despite higher Investment income, the Group profit from insurance companies fell to Sw. frs. 15 million (previous year, Sw. frs. 18 million).
The consolidated gross premiums of the «SWITZER­ LAND» General Group rose by 6.0% to Sw.frs.482.4 mil­ lion. The pronounced growth in direct insurance was con­ trasted by the decrease of premium income in the re­ insurance sector following the sale of the U.S. subsidiary company. The higher underwriting loss in direct Non-Life insurance is primarily due to a substantial strengthening of claims reserves. However, as investment income again rose, the parent company was able to show an improved overall result of Sw.frs.2.7 million (previous year, Sw.frs. 0.5 million). For the year under report a dividend of Sw. frs. 0.75 million was therefore paid (previous year, no dividend).
The gross premiums of the Vereinigte Versicherungs­ gruppe, Munich, rose by 8.7% to DM 2,794.7 million (pre­ vious year, DM 2,570.4 million). - The Vereinigte Aachen-
Berilnlsche Versicherung AG was able to increase its gross premiums by 5.5% to DM 564.5 million (previous year, DM 535.2 million). The claims experience for own account worsened which, together with the strengthen­ ing of the technical reserves, led to a higher underwriting loss. There was an easing on the cost side. Despite the higher tax outgo, investment income enabled an annual profit to be shown of DM 2.4 million (previous year, DM 6.0 million) out of which an unchanged dividend of DM 2.0 million was paid. - The business year of the Vereinigte Eos-isar Lebensversicherung AG was satisfactory. The amount of insurance in force rose by 4.0% to DM 10,500 million (previous year, DM 10,100 million). Thanks to the good investment income an increased amount could again be allocated to the reserve for policyholders' bo­ nuses. Out of the year's profit of DM 2.6 million (previous year, DM 2.4 million) a dividend of DM 0.6 million (previ­ ous year, DM 0.5 million) was paid; in addition DM 1.0 mil­ lion was allocated to the free reserves and DM 1.0 million contributed to the paid-up capital. - The premium growth of the Vereinigte Krankenversicherung AG was again above the market average. The gross premiums rose by 11.1% to DM 1,799 million (previous year, DM 1,619 million). An improved claims experience and a more favourable development of costs together with the significant in­ crease of investment income enabled a substantially higher allocation to the reserve for policyholders' bo­ nuses. The remaining annual profit of DM 15.4 million (previous year, DM 14.4 million) was used to strengthen the free reserves, pay a dividend of DM 3.3 million (previ­ ous year, DM 2.6 million) and contribute DM 3.0 million to the outstanding paid-up capital.
The FIdeiity and Deposit Company of Maryland, Balti­ more, in which the «Zurich» Insurance Company and the Swiss Re each have a 50% shareholding, is not included in the consolidation. The gross premium income amoun­ ted to US$ 110.0 million (previous year, US$ 108.0 mil­ lion), with the company achieving an underwriting profit exceeding that of the preceding year. It was gratifying that the overall result could be increased to US$ 14.1 million
The British Surety company, the General Surety & Guar­ antee Co. Limited, Wiimsiow, was able to improve its gross premium volume by10.8%to £2.5 million (previous year, £2.3 million). Despite a difficult economic environ­ ment the company again achieved a profit of £26,000 thanks to its cautious risk acceptance policy.
The SwissRe Holding Limited comprises all majority holdings whose figures have been consolidated - with the exception of Swiss Re, Zurich - together with a num­ ber of minority holdings.
In the reporting year dividend payments fell by Sw. frs. 3.5 million to Sw. frs. 30.7 million. The main reasons were the reduced payments of individual Group companies and the overall negative effect of foreign currency rate fluctua­ tions. Reduced dividends were paid by the Bavarian Reinsurance Company Limited, SR Beteiligungen AG and the Swiss Reinsurance Company (UK) Limited; no dividend was paid by the Canadian Reinsurance Com­ pany. On the other hand, the Australian Reinsurance Company Limited was able to increase its payment. Among minority holdings the added income from in­ creased dividend payments exceeded that lost from companies who paid no or a reduced dividend.
The capital structure of the company was unchanged. As a result of a repayment the loan granted by the parent company fell by Sw.frs. 14.8 million to Sw.frs.454.3 mil­ lion.
In a number of major insurance markets the Swiss Re is active via subsidiary companies, in South Africa it owns the Swiss-South African Reinsurance Company Limited, Johannesburg, with branch offices in Cape Town and Pretoria.
in Australia and New Zealand the Australian Reinsurance Company Limited, Melbourne, with branch offices in Sydney and in Auckland and Wellington, belong to the Swiss Re Group.
These subsidiary companies are active in the field of both Non-Life and Life reinsurance.
3 At the moment the head office of the Swiss-South African Re is stiii in the "Swiss House".
5 Cape Town, location of one of Swiss-South African Re's branch offices.
1, 2 Executive staff of ttie Australian Reinsurance Company Limited, Melbourne.
Gross premiums 4,819 3,004 7,823 7,296 Premiums ceded - 492 - 528 -1,020 -1,003 Net premiums 4,327 2,476 6,803 6,293 Adjustment in unearned premiums - 44 - 204 - 248 - 248 Earned premiums 4,283 2,272 6,555 6,045 Interest on Sickness insurance fund - 148 148 119 Commissions and profit commissions, tectinical management expenses -1,144 - 619 -1,763 -1,652 Claims incurred -3,433 -1,826 -5,259 -4,648
Investment income 654 107 783 668 Ottier income - - 5 4 Management expenses - 318 - 49 - 379 - 328 Rate fluctuations, depreciation. value adjustments 36 15 46 - 81 Other outgo - - 3 3
* 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.
Casft in fiand, postal bank account, bank balances 241 94 341 259 Current-account balances 1,958 272 2,235 2,161 Casti deposits 2,309 114 2,423 1,998
Fixed-interest investments 6,377 5,734 12,242 10,196 Stiares 1,192 97 1,289 1,180 Real estate 709 538 1,247 1,180 Non-consolidated tioldings 46 29 327 294
Current-account balances 906 551 1,463 1,280 Cash deposits 601 188 789 547
Technical reserves Non-Lite Insurance 7,766 3,199 10,965 9,556 Lite Insurance 2,957 2,714 5,671 4,936
Building society deposits — _ 95 43 Other liabilities 587 220 824 606
the consolidated capital funds. In the year under report this revaluation of the net assets in foreign currencies led to a foreign currency profit of Sw. frs. 19.2 million (previous year, loss of Sw.frs. 28.6 million).
The consolidated gross premiums of the entire Group in all classes rose by 7.8% (previous year, 11.2%) to Sw.frs. 10,058 million. Approx. 4% of this increase was due to the effect of higher foreign exchange rates (pre­ vious year, 10.5%. negative). In Non-Life Insurance the premium income rose by 7.2% (previous year, 5.1%) to Sw.frs.7,823 million. In Life insurance by 9.7% (previous year, 40.8%) to Sw.frs.2,235 million.
These items refer to components of the profit and loss account of the mh Bausparkasse AG and to the holding companies which. In view of their special nature, are not included under Insurance and reinsurance.
These items comprise a positive balance from realized capital gains and losses, and depreciation on invest­ ments of Sw.frs.67 million (previous year, negative bal­ ance of Sw. frs. 77 million) from foreign currency profits of Sw.frs. 12 million (previous year, Sw.frs.4 million) as well as from value adjustments on assets outside the invest­ ments sector of Sw.frs. 33 million (previous year, Sw.frs. 8 million).
The income from the Group's capital investments rose by 21.8% (previous year, 15.7%) and (before the crediting of interest in Life and Sickness business) reached a total of Sw.frs.1,233 million (previous year, Sw.frs.1,012 million). Of this amount the interest on the Life insurance and An-
Non-Life Insurance Unearned premiums 1,587 1,647 3,234 2,906 Outstanding claims reserve 6,160 1,296 7,456 6,480 Reserve for profit commission 19 256 275 170 in % of net premiums earned 181.3% 140.8% 167.3% 158.1%
Life Insurance Life insurance and annuity fund 2,595 2,261 4,856 4,228 Outstanding claims reserve 345 20 365 361 Reserve for profit commission 17 433 450 347 in % of Life insurance in force, net 2.4% 22.2% 4.2% 4.8%
The capital funds shown in the consolidated balance sheet (sum of share and non-voting share capital, re­ serves, consolidation reserve funds and Group profit) correspond to the book value of the funds invested in the entire Group by shareholders and non-voting share­ holders of Swiss Re, Zurich. In the year under report Group capital funds rose by Sw.frs.71 million to Sw.frs.872 million. Reasons for this rise are the increase of the capital funds achieved by the individual Group companies and the overall positive effect of foreign cur­ rency rates. The following table shows the changes in the Group capital funds: Changes in Group Capital Funds in millions of Swiss francs
Capital funds on 1st January 801 824 Paid-out profits for previous year - 53 - 48 Group profit 97 82 Effects of exchange rate fluctuations on opening balance sheet figures 19 - 29 Other movements 8 - 28
General Surety & Guarantee Co. Limited £ 100 1,104 4,736 2,548
Switzerland Swiss Reinsurance Company Mythenquai 50/60, CH-8022 Zurich with branch offices in Meibourne, 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, N.Y. 10017 with branch offices in Chicago, Dallas and Lakewood (Colorado) Swiss-Am Reassurance Company 100 East 46th Street, New York, N.Y. 10017 SwissRe Life Insurance Company 100 East 46th Street, New York, N.Y. 10017 North American Reinsurance Corporation 100 East 46th Street, New York, N.Y. 10017 with branch offices in Atlanta, Boston, Chicago, Dallas, Houston, Kansas City, Los Angeles, Philadelphia, San Erancisco and Seattle
Switzerland «SWITZERLAND» General Insurance Company Limited Gotthardstrasse 43, CH-8022 Zurich with branch offices in Barcelona, Brussels, Genoa, Hamburg, Vienna, Manila, Meibourne and Montreal
South Africa Swiss-South African Reinsurance Company Limited Swiss House, 86 Main Street, Johannesburg 2000 with branch offices in Cape Town and Pretoria
United States SwissRe Corporation 100 East 46th Street, New York, N.Y. 10017 SwissRe Advisers, Inc. 100 East 46th Street, New York, N.Y. 10017
Argentina Sociedad Analisis de RIesgos S.A. Alsina 756, 6° PIso, 1087 Buenos Aires
Mexico OFATEC (Mexico) S.A. de C.V. Comunal 80 Bis, Piso 5, Col. Acacias, 03240 Mexico, D.E.
Accident insurance: Insurance against injury, death, disability and/or medical costs as a result of an accident; used for both individuals (personal accident) or groups (group accident).
Burgiary, fideiity and aliied lines: Insurance against burglary, breaking and entering, robbery, embezzlement; also includes water damage, glass breakage, damage to and loss of jewellery or damage or losses in connection with the keeping of animals.
Claims incurred: All claims payments plus the adjust­ ment In the outstanding claims reserve of a business year.
Commission: Remuneration paid to the ^ insurer, to brokers or other commercial Intermediaries fortheir costs in connection with the acquisition and administration of insurance business.
Consolidated profit and loss account: Combined profit and loss account for companies belonging to the Group.
Earned premium: Premium applicable to the expired part of a reinsurance period continuing afterthe balancesheet date.
Engineering insurance: Insurance against loss of or damage to plant and machinery.
Motor insurance: Insurance against accident and liabil­ ity, as well as against accidental collision damage, in con­ nection witti motor vetiicles.
Net premiums: -> Reinsurance premium of a business year less ^ retrocession premiums.
Non-Life insurance: All classes of insurance business witti ttie exception of ^ Life.
Nuclear energy insurance: Insurance against property damage, liability and accident in connection witti ttie operation of nuclear energy installations.
inforeign currency rate actually applicable for accounting purposes and ttie rate prevailing on ttie balance-stieet date) and in stock exctiange rates (ctianges in original currency in ttie capital investments wtiicti stem princi­ pally from interest rate and stock exctiange price ctianges).
Retrocession: Passing on by ttie reinsurer of ttie ^ risk accepted in reinsurance to ottier companies (cf. retrocessionaire).
Retrocessionaire: Company wtiicti accepts ^ risks by way of ^ retrocession.
Retrocession premiums: Premium paid to ttie ̂ retro­ cessionaire for ttie part of ttie ^ risk accepted.