Swiss Reinsurance Company Mythenquai 50/60, P.O. Box, GH-8022 Zurich, Switzerland Telephone 01 2082121 Telex 59261 reas oh Cables swissre
Summary of Important Figures in millions of Swiss francs Swiss Re, Zurich 1981 1980
Management expenses, depreciation, fluctuations In stock exchange and foreign currency rates, taxes 189 149
Total dividend Dividend per share In Sw. frs. Dividend per non-voting share In Sw. frs.
French- and itaiian-speaking Switzerland, France, Italy, Spain, Belgium, Luxembourg, Greece, French-speaking Africa G. Lavanchy, Manager R.Aeberll, Deputy Manager (until 31.12.82) R. Martlgnler, Deputy Manager 8. Patthey, Deputy Manager R. Ruttlmann, Deputy Manager P. Darloll, Assistant Manager (until 31.12.82) A. GalfettI, Assistant Manager M.-L. Musy, Assistant Manager J.Stelnrisser, Assistant Manager
Reinsurance technique, acquisition, special risks, insurance medicine R. Hedlnger, Manager J.-C. Mayor, Deputy Manager E. Deled, Deputy Manager R.Eckert, Deputy Manager L D. KIrlanoff, Deputy Manager F. Lock, Deputy Manager H.C. Rutlshauser, Deputy Manager P.Strlokler, Deputy Manager S.Courant, Assistant Manager E. HIrzel, Assistant Manager H. W. Krels, Assistant Manager K. Küstahler, Assistant Manager A. Loye, Assistant Manager 8. Menn, Assistant Manager F. Rennlnger, Assistant Manager F. Schulthess (Ms), Assistant Manager J.-P. Vogel, Assistant Manager K.WettenschwIler, Assistant Manager M. LHettI, 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.C. Roos, Manager H.R.Kaufmann, Deputy Manager
Main lines: Accident/Llabiiity, Motor, Fire, Hall, Burglary R. R. Doerr, Deputy Manager E.Jutzl, Deputy Manager M.A.Tobler, Deputy Manager F. Eugster, Assistant Manager P. Gasser, Assistant Manager R. 8chllllng, Assistant Manager P. Szöllösy, Assistant Manager H.Vollenwelder, Assistant Manager H.-K.Zulauf, Assistant Manager
Special lines: Engineering, Aviation, Nuclear energy. Marine A. Bal, Deputy Manager H. Fischer, Deputy Manager A.Kunz, Deputy Manager W. KQnzle, Deputy Manager J. W. Youngs, Deputy Manager E. Betz, Assistant Manager M. Gasche, Assistant Manager H. F. Enzmann, Member of Management H.TIedemann, Member of Management
Risk management. Special assignments, Consultancy service B.NIgg, Assistant Manager J.Hofmann, Member of Management
Holding, planning and control, law and taxes R. Ochsenbein, Manager T.Obrist, Deputy Manager C.BIanc, Assistant Manager 0. E. Brooks, Assistant Manager H. H. Frey, Assistant Manager J. B. R. Lieberman, Assistant Manager
As far as international reinsurance activity is concerned, reinsurance and finance affect each other in a number of ways. In an endeavour to achieve essential financial goals - securing liquidity, safeguarding solvency and earning an appropriate business result - the reinsurer is confronted from country to country with varying restric­ tions as regards the investment and transferability of his funds. Together with the past or expected foreign cur­ rency rate developments, such circumstances provide important criteria on which decisions as to the extent and form of reinsurance activity in the various countries are based.
The interpenetration of reinsurance and financial consid­ erations has, however, recently produced extremely dis­ turbing effects and caused confusion. In an attempt to gain a rapid foothold in reinsurance business and to acquire a substantial volume of business in a short time, numerous reinsurers offer their covers at inadequate pre­ miums probably founded on Incomplete risk Information and vague assumptions of interest, capital and foreign currency gains additionally expected. It is to be hoped that the current worldwide slide of interest rates and the economic difficulties will accelerate a return to the elementary principles of Insurance and reinsurance tech­ nique.
As a result of the rising loss burden In numerous classes of business, inflation, delayed premium adjustments and excessive price competition, many insurers show sub­ stantial undenvrlting losses, which has prompted them to seek counterbalance in the financial sector. Not least in this connection the reinsurer is confronted with ideas and requests of his clients which are extremely difficult to reduce to a common denominator. The belief is widely held that the reinsurer too must seek to offset underwrit­ ing losses with financial Income. The counter-argument is, however, that loss experience In reinsurance is subject to considerable fluctuations in view of the accumulation of complex, large and - as regards rating - difficult risks, calling for appropriate safety loadings on the premiums. The reinsurer cannot therefore afford to intensify the al­ ready high degree of uncertainty in the calculation of the technically necessary premium even more by including in it the unknown element of possible financial Income.
In the year under report, the gross premium from a// branches totalled Sw. frs. 3,701 million (previous year, Sw. frs. 3,642 million); of this total, Sw. frs. 822 million (previous year, Sw. frs. 814 million) was ceded to retro­ cessionaires, leaving for the Company net premiums amounting to Sw. frs. 2,879 million (previous year, Sw. frs. 2,828 million).
Fire reinsurance remains our most important class of business. Following a small profit in the previous year it closed with a slight loss which is due to industrial Fire business. The reinsurance of facultative risks again brought a profit in the year under review. Once more there were no catastrophe losses, although medium-sized losses rose greatly both as regards their number and the amount paid. Explosions and arson were the most fre­ quent causes of loss. No or no clear cause of loss was ascertainable in almost 50% of all major Fire and Loss of Profits claims. Here too, arson or sabotage is likely to have been involved in a large number of cases. In view of the internationalization of competition it is less easy to achieve a geographic balance in Fire business than was formerly the case.
The restraint exercised by the Swiss Re in Burgiary, Fideiity and ailied lines as a result of the loss experience which has been worsening for years led to a reduction in the premium income. It was possible to reduce the previ­ ous year's loss by two-thirds. In the water damage cate­ gory a deficit was produced for the first time, while the glass breakage category showed a positive result. The main problem continues to be rising crime in Burglary insurance. Premium increases, improvements in security and more careful selection of risks brought encouraging results in certain countries. In many cases, however, the remedial measures are thwarted by escalating crime before they can be of effect.
The relatively pronounced premium growth in Accident reinsurance is due to new reinsurance treaties of our subsidiary companies in North America and the strength of the dollar against the Swiss franc. Although the loss was less than it was in the previous year, it was again due to Workmen's Compensation business which is being in­ creasingly handled according to criteria of social security.
The Aviation section of the Techni­ cal and Special Lines department deals v\/lth the reinsurance of accident, liability and hull risks in connection with air transport.
The premium income of Sickness reinsurance remained stable; this class produced a further profit.
In Engineering reinsurance the premium erosion re­ ported last year persisted. As a result of the worldwide worsening of the economic situation, new investments also declined. Premium income in this branch fell slightly. There were no actual major losses and a profit was still produced.
Premiums in Nuclear Energy reinsurance rose relatively strongly, the greater part stemming from the United States. The profit is in line with that of the previous year and enables the reserves which in this branch are impor­ tant.
Fire 1,149 1,134 Hail 24 21 Burglary, Fidelity and allied lines 81 87
The share markets were not able either to escape the unsatisfactory development of the economic environ­ ment in general. The respective indices of practically all major share markets, with the exception of the Japanese, British and Dutch ones, were lower at the end of the re­ porting year than they were at the start. The price declines in France and Australia were particularly pronounced.
The balance-sheet value of capital market investments and real estate of Swiss Re, Zurich, amounting to Sw. frs. 3,963 million was Sw. frs. 134 million higher than the previous year. This total increase is due to net new invest­ ments on the one hand and write-offs as well as to foreign currency adjustments, which clearly halted growth, on the other.
Bonds, bank term deposits and mortgage bonds 1,994 2,229 Loans (including mortgages) 653 470 Fixed-interest securities witfi equity cfiaracter 277 205 Sfiares 636 568 Real estate . 403 357
Holdings and loans rose by Sw. frs 13 million to Sw. frs. 496 million, mainly as a result of tfie capital increase of a Canadian subsidiary company.
Cash deposits from reinsurance transactions fell by Sw. frs. 11 million to Sw. frs. 1,312 million. Tfie following table sfiows tfie structure of total investments at balancesfieet values.
Holdings 27 19 Loans to Group companies 469 464 Holdings and loans 496 483 Net casfi deposits from reinsurance transactions* 1,312 1,323 * Net amount, i.e. after deduction of tfie stiares due to retroces­ sionaires.
Investments in tfie amount of Sw. frs. 86 million (previous year, Sw. frs. 75 million) are field by trustees appointed by us in over­ seas territories.
For the staff of a reinsurance company, selective training and further education are especially Important as the variety of jobs that have to be dealt with, particularly In the field of reinsurance technique, can practically only be learned by working In specialized companies. For this reason on-the-job training takes on great significance. In addition to attending Internal courses and seminars, employees are delegated for further training to external Institutes, sent abroad to acquire foreign language profi­ ciency or receive practical training at Group companies or other companies with whom we have close connec­ tions.
In 1981 Intensive executive training was again carried out. Newly promoted and existing members of the middle management received Instruction at various courses with principal emphasis on management topics In general. The seminar held annually for members of the senior management dealt primarily with principles of corporate policy, essential aspects of underwriting practice and Important questions of personnel management In the 1980s.
Closely linked with reinsurance activity Is consultancy in the field of insurance underwriting: Assessment of large or unusual risks, support to clients In the settlement of claims, assessment of loss prevention measures as well as assistance In carrying out complex profitability and profit commission calculations In Life Insurance.
Of the numerous publications which our Company pro­ duces two have over the years achieved a wide circula­ tion: "experlodica" contains summarized news Items from the International Insurance and economic press and Is printed In German, English, French and Spanish with a total of 6,500 copies per month, while "sIgma", which also appears regularly, contains studies by our own staff on economic or Insurance topics published In a German, English and French edition with a total print of approxi­ mately 4,300 copies.
As part of general Insurance training and to pass on spe­ cialized branch knowledge members of staff from various sectors serve as Instructors at seminars and courses organized by both the Swiss Re, Zurich, and by other companies.
In view of the wide distribution of its share capital, which has remained unchanged for many years, the Swiss Re may clearly be termed a public company. For example 10,300, or 64%, of the registered shareholders have between 1 and 10 shares and a good 5,000, or 32%, between 11 and 100 shares. The percentage of owners with more than 100 shares was relatively low at approxi­ mately 4%. Some 60% of the employees at Head Office have purchased registered staff shares; overall they account for 0.4 % of the total registered share capital. The major institutional investors include retirement funds, other personnel welfare institutions and foundations. About 40% of the registered shareholders are domiciled in the City or Canton of Zurich. A substantial portion (16 %) are domiciled in the French-speaking part of Switzerland, while 8% are domiciled in the Canton of Berne and a further 8 % in the two Cantons of Basle (City and Country).
In accordance with the credit for donations approved by the 1980 General Meeting of Shareholders, donations totalling Sw. frs. 555,000 were made during 1981. Approxi­ mately a fifth each was given to support the following four categories: foreign and domestic development aid, gen­ eral charities and welfare, training and research, and cul­ tural aid. The rest was mainly spent on humanitarian aid. Apart from the substantial amounts regularly paid to Swiss and international institutions active in this field, considerable amounts were donated for earthquake vic­ tims in Algeria and Italy.
The contributions for foreign development aid went to several major national organizations to support their work in the Third World. The domestic development aid was mainly used to support urgently needed improve­ ment work in Swiss mountain regions.
In addition to the amounts paid to various national train­ ing and research institutions, donations were again made during the reporting year to Swiss schools abroad, in­ cluding those in Latin America and the Far East. On the cultural side, donations were made to help renovate several historic buildings of national importance.
At this year's General Meeting the terms of office of Messrs. Helmut F. Rudolf and Edwin Stopper expire. Both gentlemen are standing for re-eiection.
Having reached retirement age, Mr. Max E. Eisenring is re­ signing from the Board. He has been with our Company since 1944, initially as a Member of the Management, from 1958 as General Manager and from 1964 to 1979 as Chairman of our Board of Directors which, as a token of his excellent service, appointed him Honorary Chairman of the Company. Mr. Eisenring has continued to act as a Member of the Board since 1979. We are deeply indebted to him for his many years of highly valuable activity in our Company and are pleased that, as Honorary Chairman, his ties with the Swiss Re will continue.
31st December, 1981; Messrs. Edouard Burnens, Deputy Manager, and Werner Rüegg, Assistant Manager, retired on 30th June, 1982. We should like to express our sincere gratitude to ail four gentlemen for their many years of valuable service to our Company. - Mr. Edwin Wydier, Assistant Manager, whom we should also like to thank, left our Company at the end of January, 1982.
At this year's General Meeting the three-year term of office of the Swiss Auditing and Fiduciary Company, Zurich, expires. The Board of Directors will propose to the shareholders that the mandate be renewed for a further three years.
Having reached retirement age, Messrs. Willy Küster, Manager, and Martin Trippei, Deputy Manager, retired on
The General Managers: P. E. Christen, P.-F. Niquiiie, H. Odermatt, H. Schönenberger
Balance Sheet before approval of tfie proposal of tfie Board of Directors of. notes on page 22
Disposable profit Profit brought forward from previous year 2,242,819 Net Profit 80,156,062 82,398,881 77,137,819
All items of the Balance Sheet and Profit and Loss Account in foreign currencies were uniformly converted into Swiss francs using the average foreign currency rates as at 31st December, 1981. The currencies which are most important for our business activity abroad devel­ oped over the previous year as follows: Average Foreign Currency Rates on Balance-sheet Date*
The surrenders in business assumed amounted to Sw. frs. 29.7 million, of which Sw. frs. 0.4 million was further debited to retrocessionaires. A total of Sw. frs. 29.3 million remained for own account as against Sw. frs. 33.3 million in the previous year.
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. 115.1 million to Sw. frs. 1,826.7 million.
Gross premiums totalled Sw. frs. 369.1 million, Sw. frs. 7.1 million of which were for annuities purchased. After deduction of retrocession premiums of Sw. frs. 21.1 mil­ lion, the remaining net premiums (premiums for own ac­ count) amounted to Sw. frs. 348.0 million.
Of the total increase of Sw. frs. 57.4 million, Sw. frs. 55.0 million applies to Life insurance and Sw. frs. 2.4 million to annuities.
The commissions and profit commissions calculated for business assumed totalled Sw. frs. 75.2 million. The retro­ cessionaires' share was Sw. frs. 2.8 million, so that Sw. frs. 72.4 million remained for own account.
The account for depreciation, fluctuations in stock exchange and foreign currency rates closed with a nega­ tive balance of Sw. frs. 33.1 million (previous year profit of Sw. frs. 7.4 million). Market rate differences on invest­ ments contributed a net loss of Sw. frs. 38.0 million (pre­ vious year, gain of Sw. frs. 31.4 million). Although there was a net profit of Sw. frs. 110.2 million (previous year, Sw. frs. 147.5 million) from realized capital gains and losses, there was also a great leap In the need for write­ offs as a result of the worldwide increase in interest rates in the year under report. It amounted to Sw. frs. 148.2 mil­ lion (previous year, Sw. frs. 116.1 million), almost threequarters of which were on fixed-interest securities.
Fluctuations in foreign currency rates brought overall a profit of Sw. frs. 15.3 million, against a loss In the previous year of Sw. frs. 11.8 million.
In the year under report the tax burden amounted to Sw. frs. 43.1 million, a drop of Sw. frs. 7.2 million over the previous year. This reduction is due to the fact that, unlike the previous year, no stamp duty had to be paid on newly issued non-voting shares and to the fact that the dis­ solving of provisions in 1979 - because of the change­ over in the balance-sheet date - on which Federal Defence tax had already been paid only now had a reduc­ ing effect on the taxes.
Cash deposits with ceding companies have fallen over the previous year by Sw. frs. 16.4 million to Sw. frs. 1,448.4 million, which was largely due to the effects of foreign cur­ rency fluctuations.
The portfolio of capital market investments (fixed-inter­ est securities, loans and shares) and real estate rose by Sw. frs. 133.1 million to Sw. frs. 3,962.8 million. The hidden surplus on capital market investments (excluding loans), i.e. the difference between the book and market value of the individual securities amounts to Sw. frs. 328.0 million; it has dropped by Sw. frs. 155.0 million to 11.3% (previous year, 16.1 %) of the balance-sheet value of securities. The drop is debited to all categories of investment; it is, how­ ever, largely caused by the lower foreign currency rates.
Other assets comprise largely accrued investment in­ come and accounts receivable.
Of these balances, Sw. frs. 443.6 million was for reinsur­ ance assumed and Sw. frs. 45.4 million for reinsurance ceded; other liabilities totalled Sw. frs. 17.9 million.
As the Auditors of your Company we have examined the accounts for the year ended 31st December, 1981, in accordance with the provisions of the law.
General Income and Outgo Investment income Management expenses Depreciation, fluctuations in stock exchange and foreign currency rates
Assets Cash in hand, postal bank account, bank balances Current-account balances Cash deposits
' Reinsurance business of tfie calendar year and general income and outgo for the period from 1.7,-31.12.79 ' These figures are not oomparable with those of the other years following change in balance-sheet date from 30th June to 31 sf December.
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«SWITZERLAND» General Group «SWITZERLAND» General Insurance Company Limited, Zurich SWITZERLAND General Insurance Company (London) Limited, London SWITZERLAND General Insurance Corporation of New York, Tarrytown
Exchange rates were subject to considerable fluctuations in 1981. The higher valuation of the Swiss franc against all major currencies, with the exception of the US and Canadian dollars, had a profound effect on the Group accounts.
The generally high Interest rates in major markets caused a rise In investment income to Sw. frs. 556 million (pre­ vious year, Sw. frs. 482 million). High interest rates and depressed share and bond prices called, however, for considerably higher write-offs on securities, which for the purpose of the Group Accounts are valued according to the lower of cost or market method. These adjustments had a much greater effect on the overall result than they did in 1980. The increase in management expenses cor­ responded to that of the previous years. There was a small drop in the tax burden. The consolidated Group profit of the reinsurance companies totalled Sw. frs. 64 million (previous year, Sw. frs. 82 million).
The premium growth of the Canadian Reinsurance Com­ pany, Toronto, is due to new business in Non-Life reinsur­ ance. The gross premiums rose to Can. $ 137.1 million (previous year. Can. $ 103.7 million) with an underwriting loss. This unsatisfactory result Is due to excessive price competition in the Canadian market. The increase of in­ vested funds at an unchanged high interest level together with higher capital gains led to an increase of the Invest­ ment income, although this was not enough to bring about a positive overall result. Forthe reporting yearthere was a loss of Can. $ 1.3 million (previous year, profit of
Can.$ 1.8 million), which explains why no dividend was paid (previous year, Can.$ 0.5 million).
There was also a considerable increase in the portfolio of the Canadian Reassurance Company, Toronto. The growth was largely due to American special reinsur­ ances. The production of traditional business also devel­ oped gratifyingly. Overall, the underwriting result de­ clined. The profit shown rose to Can.$ 4.4 million (pre­ vious year, Gan.$ 3.1 million). The dividend was un­ changed at Can.$ 0.5 million.
less than in the previous year (Rand 1.9 miiiion). in the reporting year an unchanged dividend of Rand 1 miiiion was paid.
The Australian Reinsurance Company Limited, Mel­ bourne, registered a premium growth of 10%. The pre­ mium volume in Non-Life business rose to Austr. $ 56.4 miiiion. The negative underwriting result is due to the ungratifying competition situation in the Australian Non-Life Insurance market. - The gross amount of Life reinsurance business in force rose by 17% to Austr. $ 1,700 miiiion, while the underwriting result was negative because of the unfavourable claims experience, investment income and realized capital gains on shares led to an improved overaii result of Austr. $ 0.7 miiiion (previous year, loss of Austr. $ 0.1 miiiion). The dividend payment amounted to Austr. $ 0.6 miiiion (previous year, Austr. $ 0.5 miiiion).
in the second year of its business activity the Tudor insur­ ance Company, New York, achieved gross premiums of US $ 1.8 miiiion but with an underwriting loss. After incor­ porating investment income, management expenses and taxes, an overall profit remained of US $ 151,000 (pre­ vious year, US$ 388,000).
The SwissRe Holding Limited comprises all majority holdings whose figures have been consolidated - with the exception of Swiss Re, Zurich - together with a number of minority holdings.
The outgo of the Profit and Loss Account comprises mainly the interest of Sw. frs. 17.7 million (previous year, Sw. frs. 15.7 million) on the loan granted by Swiss Re, Zurich, taxes of Sw. frs. 3.5 million (previous year, Sw. frs. 2.4 million) management expenses of Sw. frs. 1.4 million (previous year, Sw. frs. 1.1 million) and depreciation and fluctuations in stock exchange and foreign currency rates of Sw. frs. 10.0 million (previous year, Sw. frs. 8.0 million). No book value adjustments were necessary on Group company holdings, since their book values were in fact below the market values on the balance-sheet date. On the other hand, in the year under report write-offs were made in connection with various minority holdings as a result of foreign currency rate fluctuations, reflecting the falls in the exchange rate of the relevant currencies against the Swiss franc.
The net profit amounted to Sw. frs. 1.6 million (previous year, Sw. frs. 1.8 million) which, together with the profit carried forward of Sw. frs. 0.6 million, enabled an un­ changed dividend payment of Sw. frs. 2 million to be made to Swiss Re, Zurich.
The Swiss Re has its own subsid­ iary companies in the leading centres of insurance. In Canada it owns on the Life reinsurance side the Canadian Reassurance Com­ pany, Toronto, with a branch office in Montreal and on the Non-Life side the Canadian Reinsurance Company, Toronto, with branch offices in Montreai and Vancouver.
in the United Kingdom the Swiss Re is represented by a reinsurance and two insurance companies. The Swiss Reinsurance Company (UK) Limited, London, with a branch office in Hong Kong, is active in ail fieids of reinsurance; in the same market, its subsidiary company, the Palatine insurance Company Limited, London, handles Non-Life business in co-insurance and facul­ tative reinsurance. The General Surety and Guarantee Co. Limited, Wiimslow, conducts Surety busi­ ness.
City Hail Centre, Toronto 4, 5 in Montreai both the Canadian Reassurance Company and the Canadian Reinsurance Company have a branch office
Underwriting result from Non-Life insurance - 129 7 - 136 - 102
Gross premiums 1,598 440 2,038 1,447 Premiums ceded outside the Group - 179 - 15 - 194 - Ill Net premiums 1,419 425 1,844 1,336 Adjustment in policy and annuity valuations* - 328 - 215 - 543 - 345 Interest on Life insurance and annuity fund* 63 162 225 182 Commissions and profit commissions* - 363 - 231 - 594 - 489 Claims incurred incl. adjustment in outstanding claims reserve* - 700 - 92 - 792 - 514 Surrenders* - 52 - 32 - 84 - 93
Taxes Group company profit applicable to minority shareholders * Net amounts, i.e. after deduction of ttie stiares due to retrocessionaires or reinsurers
Consolidated Balance Sheet cf. notes on page 43 in millions of Swiss francs
Cash in hand, postal bank account, bank balances 182 70 259 270 Current-account balances 1,885 257 2,161 1,585 Cash deposits 1,895 103 1,998 1,852
Fixed-interest investments 5,370 4,774 10,196 9,188 Shares 1,108 72 1,180 1,220 Real estate 669 511 1,180 1,098 Non-consolidated holdings 51 26 294 292
Building society deposits — - 43 13 Other liabilities 377 220 606 385
The Group accounts were compiled according to the same principles as in previous years based on the pub­ lished individual statements of the Group companies as at 31st December, 1981. The only exception was the Bava­ rian Reinsurance Company Ltd. whose balance sheet had not yet been published at the time of the consolida­ tion.
in the reporting year the scope of consolidation was ex­ tended by the inclusion of the Swiss-Am Reassurance Company, a subsidiary company of SwissRe Holding (North America) inc. In Great Britain the holding of the General Surety & Guarantee Co. Limited was transferred to the General Surety Holdings Limited which had been founded the year before. The Magdeburger Rückversicherungs -AG, which beiongedtothe MagdeburgerGruppe, is no longer included in the consolidation having been sold in the summer of 1981.
Fixed-interest investments and shares are uniformly valued at the lower of cost or market. Real estate is con­ solidated using the values shown in the accounts of the individual Group companies; as a rule these corre­ sponded to the acquisition price less permissible depre­ ciation. Non-consolidated holdings are valued at acquisi­ tion or, where necessary, at lower market values.
The following notes on various items of the Consolidated Profit and Loss Account and the Balance Sheet comple­ ment the Group Report on page 34.
Assets and liabilities as well as outgo and income of the companies included in the consolidation are shown at 100%; the shares applicable to minority shareholders were deducted from the capital funds and profit and shown as separate items.
The consolidated gross premiums of the Group (ail classes) rose by 11.2% (previous year, 16.2%) to Sw. frs. 9,334 million, in Non-Life insurance the premium income rose by 5.1% (previous year, 11.4%) to Sw. frs. 7,296 million, in Life insurance by 40.8 % (previous year, 46.3 %) to Sw. frs. 2,038 million.
In addition to commission payments and profit commis­ sion reimbursements ttiis item includes ttie expenses in­ curred in insurance by thie field service and external offices.
The claims incurred comprise payments tor Lite and An­ nuity insurance as well as the adjustment in the outstand­ ing claims reserve. The total outgo tor own account rose in the year under report by Sw. trs. 278 million to Sw. trs. 792 million. Of this amount, Sw. trs. 700 million concerned reinsurance companies and Sw. trs. 92 million insurance companies.
This amount included a credit of Sw. trs. 225 million (previous year, Sw. trs. 182 million) to Lite insurance tor the interest on the Lite insurance and annuity fund and Sw. trs. 119 million (previous year, Sw. trs. 103 million) to Sickness business in Non-Lite insurance.
The consolidated balance-sheet values of capital invest­ ments (incl. non-consolidated holdings) increased over­ all by 9 % or Sw. trs. 1,052 million to Sw. trs. 12,850 million.
Non-Life Insurance Unearned premiums 1,517 1,389 2,906 2,939 Outstanding claims reserve 5,343 1,137 6,480 6,243 Reserve tor profit commission 19 151 170 150 Total 6,879 2,677 9,556 9,332 in % of net premiums earned 171.5 131.7 158.1 157.4
Life Insurance Life insurance and annuity fund 2,307 1,921 4,228 3,455 Outstanding claims reserve 352 9 361 207 Reserve tor profit commission 13 334 347 240 Total 2,672 2,264 4,936 3,902 in % of Lite insurance in force, net 2.9 22.1 4.8 4.3
The profit and capital funds applicable to third party shareholders correspond to the percentage shares of non-Group shareholders in the capital funds or in the re­ sults of the relevant Group company. The capital funds applicable to minority shareholders tell slightly in the reporting year by Sw. trs. 8 million to Sw. trs. 25 million, while the applicable share in the profit increased by Sw. trs. 2 million to Sw. trs. 5 million.
These items correspond to the capital funds at book value of the Swiss Re as parent company. The reserves shown comprise the statutory reserve fund, special reserve fund, reserve fund tor catastrophe losses as well as the profit carried forward from the previous year.
Swiss-Am Reassurance Company US $ 100 1,531 141,652 139,084 1 Swiss Reinsurance Company (UK) Limited £ 100 6,055 92,725 79,538 1 SwissRe Life Insurance Company US $ 100 4,857 55,874 267,598 1 Swiss-Southi African Reinsurance i Company Limited Rand 100 7,365 115,366 96,942
^ Magdeburger Versicherungsgruppe: ® Magdeburger Allgemeine Lebens- und Rentenversicherungs-AG DM 100 9,300 1,144,650 164,104 £ Magdeburger Union Rectitssctiutz H Versichierungs-AG DM 100 4,960 25,281 25,094
: 1 SwissRe Holding (North America) Inc. US $ 100 41,573 76,177 -
This summary covers 8 business years, as a consolidated Group account was first published for the 1974/75 business year.
Switzerland «SWITZERLAND» General Insurance Company Limited Gotthardstrasse 43, CH-8022 Zurich with branch offices in Barcelona, Brussels, Genoa, Hamburg, Vienna, Manila, Melbourne and Montreal
United Kingdom General Surety & Guarantee Co. Limited Hawthorn Hall, Hall Road, Wilmslow, Cheshire, SK9 5BZ Palatine Insurance Company Limited Forum House, 15-18 Lime Street, London EC3M 7AP SWITZERLAND General Insurance Company (London) Limited Tower House, 38 Trinity Square, London EC3N 4HR
United States Fidelity and Deposit Company of Maryland Charles and Lexington Streets, Baltimore, Md. 21203 Tudor Insurance Company 100 East 46th Street, New York, N.Y. 10017
Australia/New Zealand Australian Reinsurance Company Limited Embank House, 325 Collins Street, Melbourne, Vic. 3000 with branch offices in Sydney and in Auckland and Wellington, New Zealand
Venezuela OFATEG Venezuela G.A., Torre La Noria, Piso 8 - Norte, Paseo Enrique Eraso, Urb. Las Mercedes, Caracas 1060
Glossary of Technical Terms For readers who are not familiar with insurance and reinsurance, the following glossary briefly defines various technical terms as used in this Annual Report.
Aviation insurance: Insurance of accident and liability risks, as well as ^ hull damage. In connection with the operation of aircraft.
Earned premium: Premium applicable to that part of the reinsurance period continuing after the business year of the balance sheet.
Facultative reinsurance: Reinsurance of ^ risks on an individual basis (cf. treaty reinsurance) In which the -> reinsurer is free to accept or reject the offer.
Fire insurance: Insurance against fire, lightning, explo­ sion and damage caused by falling aircraft; can also embrace insurance against windstorm, earthquake, flood, other natural hazards, political risks (strike, riot, etc.) and loss of profits (business Interruption) as a result of these events.
Fluctuations in foreign currency rates: Profits or losses from foreign currency transactions which result from the difference between the rate actually applicable for ac­ counting purposes and the conversion rates prevailing on the balance-sheet date.
Hull damage: Damage to or loss of aircraft and waferborne vessels.
Life insurance: Insurance providing payment of a sum of money upon deatti of ffie insured and, in thie case of endowment insurance, at ttie end of a specified period wtiile ttie insured is still alive.
Lower of cost or market: Method used to value capital market Investments whereby on the balance-sheet date the lower of the two applicable values (acquisition cost or market/stock exchange price) is taken.
Marine insurance: Insurance against damage or loss of ships and cargoes; also Includes off-shore drilling plat­ forms and oil rigs.
Nuclear energy insurance: Insurance against property damage, liability and accident in connection with the operation of nuclear energy installations.
Portfolio: The totality of ̂ risks assumed by an -^insurer or -»• reinsurer; also the totality of investments.
Products liability: Insurance against liability arising from the manufacture and distribution of defective prod­ ucts.
Profit commission: Contractually agreed commission paid by the -> insurer or ^ reinsurer in proportion to his profit on a particular piece of insurance or reinsurance business.
Reinsurer: Company which accepts a share of the ^ insurer's risks.
Retrocession: Passing on by the ^ reinsurer of the ^ risk accepted in reinsurance to other companies (of. retrocessionaire).
Surrender: Payment to the insured of the cash value of an insurance policy before the policy has run its course.