Executive Committee and Group Management Organization chart of Swiss Re, Zurich 6
Management expenses, taxes fluctuations in stock exchange and foreign currency rates, depreciation 18
Summary of Important Figures in millions of francs Swiss Re, Zurich 1980 1979
Management expenses, taxes, depreciation, fluctuations in stock exchange and foreign currency rates 149 56*
Total dividend Dividend per share In Sw. frs. Dividend per non-voting share (issue of December 1980 - half dividend) in Sw. frs.
Board of Directors Term to expire in Max E. Eisenring* Honorary Chairman, Rüschlikon 1982
Marcel Odier Cologny, Partner in Lombard, Odier & Cie., Bankers, Geneva 1984
Secretary to the Board of Directors Ernst A. Kubli, General Secretary -
General Managers Paul E. Christen Paul-Francis Nlqullle Hernnann Odermatt Herbert Schönenberger
Fritz Ehrsam Peter P. Hügle Walter Isler Ernesto Jutzi Hans R.Kaufmann Lavre D. Kirianoff Albert Kunz
Jean-Claude Mayor Max Nabholz Samuel Patthey Willi Rüetschi H.Conrad Rutishauser Otmar Schmidlin Peter Schuppli
Assistant Managers Reto Arpagaus Balthasar Heyer Werner Müller Francoise Schulthess Engelbert Betz Ernst Hirzel Jörg Niederer Paul Schweizer Peter Bieri Gerhard Holzel Bruno Nigg Dieter Söhner Christoph Blanc Hans W.Kreis Rudolf Cberle Hans Spörri Simon Courant Werner Künzle Theodor Cbrist Jürg Steinrisser Pierre Darioli Karl Küstahler Bernard Perrin Paul Szöllösy Enzo Delcö Bruno Laube Luis T. Pozzi Kurt Wettenschwiler Erich Etter J.B. Richard Lieberman Felix E. Rohner Urs Winter Fritz Eugster Fulco Lock Werner G. Rüegg Louis Wüger Heinz Fischer Robert Martignier Robert Rüesch Edwin Wydier Hans H. Frey Simon R.Menn Rene Rüttimann John W. Youngs Leon Genoud Jean-Pierre Michot Werner Schiegg Hans-Kaspar Zulauf Georges Haering Walter Minoretti Rubo Schilling
Following the interim business year in 1979 (when the balance-sheet date was changed from 30th June to 31st December), the 1980 business yea/"comprises both rein­ surance business and other income and expenditure for the period from 1st January to 31st December, 1980. Figures are fully comparable with those of the previous year in the case of reinsurance business, but not in the case of other income and expenditure.
The international atomization of particularly large reinsur­ ance risks is in many cases effected with the aid of re­ insurance brokers. They act as intermediaries between insurer and reinsurer and have a responsible role to play in the placing of risks, the distribution of premiums and the settlement of losses under the reinsured covers. For this activity they receive remuneration based on the pre­ miums, which is why they naturally strive to become in­ volved with as large a share of the worldwide premium volume as possible, thereby intensifying competition even further and encouraging the placing of under-rated or uninsurable risks.
The strong position of large poiicyhoiders (industrial concerns, airline companies, shipping lines, etc.) when taking out their Fire, Marine, Liability or other commercial policies, which generate a substantial premium volume, makes It also difficult to stop the premium erosion. In cer­ tain markets unbearably high losses might force certain risk carriers to withdraw, which could possibly bring about a shrinkage of the excess capacity and reduce the pressure on premiums. The urgently needed remedying of the market Is not only In the Interest of insurers and reInsurers but above all of the policyholders. Only a per­ sistently good profit situation in insurance and reinsur­ ance guarantees proper coverage of the many-faceted and constantly changing or growing insurance needs. In so doing it is of decisive significance that all involved with the risk realise that their interests largely coincide.
Accident 192 157 155 156 188 Sickness 80 111 110 86 87 Third Party Liability 302 265 220 211 213
The gross premium income from non-Life reinsurance, when expressed in Swiss francs, rose by Sw. frs. 346 mil­ lion, or 11.8%, over the previous year to Sw. frs. 3,269 mil­ lion. A total of 92% of the premium volume was booked in foreign currencies. After deduction of the retrocessions within and outside the Swiss Re Group, the remaining premium income for own account amounted to Sw. frs. 2,473 million (previous year, Sw. frs. 2,249 million).
Non-Life reinsurance showed a loss of Sw. frs. 80.4 mil­ lion as against a loss of Sw. frs. 48.8 million in the pre­ vious year. Whereas the result of the business handled from Zurich showed a marked improvement, the retro­ cession of subsidiary companies unfavourably affected the result, particularly because of supplementary ac­ counts for losses from former years.
Accident reinsurance again closed with a loss, the pre­ mium growth in this branch being mainly due to the strengthening of the U.S. dollar against the Swiss franc. The principal reason for the loss was the late reporting of claims in American Workmen's Compensation business.
Once again the premium volume of General Third Party Liability reinsurance has grown at an above average rate; the loss has been further reduced.
The premium volume of Motor reinsurance remained practically stable. The loss was considerably higher than in the previous year and stems from treaty business which is reinsured pro rata and where the result is depen­ dent on the adjustment of insurance premiums to infla­ tion. The run-off of reserves for outstanding ciaims showed overall a slightly positive result in the reporting year. In certain major markets overall claims inflation lagged for the time being behind the general rate of infla­ tion. A realistic appraisal of the economic and social de­ velopment would, however, make it appear necessary to strengthen once more the reserves for losses incurred but not reported and inflationary increases in the loss amounts.
Marine reinsurance closed with a loss for 1980 too; the traditional consideration by underwriting years showed first signs of an improved experience of the portfolio which is written with the greatest of restraint.
\n Engineering reinsurance the slowing down of premium growth noted in the previous year continued in the year under report. The result was somewhat lower than in the previous year but may still be termed satisfactory. Once again there were no actual major losses. In coming years the branch will be increasingly affected by the worldwide drop in new investments. The extensive cover capacity available promotes the further erosion of premiums.
The premium growth in Aviation reinsurance is primarily due to foreign exchange rate changes. In this branch too the Swiss Re was spared actual catastrophe losses in the year under report. The loss is less than in the previous year.
Following the loss in 1979, Nuclear energy reinsurance again registered a positive result in the year under report.
Life Reassurance in Force for Own Account at Year's End (excluding Annuities) in thousand millions of francs
Numerous markets are serviced from . jj the Head Office in Zurich. In parfic-
'1:! offices or advisory offices. The pictures show Tokyo (1, 2, 3) and Mexico City (4, 5, 6) where Swiss Re has representative offices.
The technical reserves rose in the year under report by Sw. frs. 540 million to Sw. frs. 5,509 million. Of this total, Sw. frs. 4,144 million was for non-Life reinsurance and Sw. frs. 1,365 million for Life reassurance. In the non-Life sector, the ratio of reserves to net premium volume rose slightly. In the Life branch the relation between reserves and insurance in force continued to decline, reflecting the trend, already noticeable in previous years, towards pure risk business which calls for less reserves.
In the year under report the price rise in many industrial countries continued. At the same time the prevailing in­ stability of balance of payments intensified. iViost of the western central banks sought to counter this develop­ ment with a renewed tightening of their restrictive mone­ tary and credit policy. The consequence was a further in­ crease of the already high interest rates and a slowing down of economic activity, which was particularly clear in the Anglo-Saxon countries, although traces were also seen in the other industrial nations.
ation of Zurich. The diagrams on the opposite page show the distribution, among the various investment catego­ ries. of capital market investments and real estate at balance-sheet and market values.
By currencies the capital market investments and real estate at balance-sheet values are structured as follows: 38% (previous year, 39%) in Swiss francs, 34% (previous year, 36%) in the remaining European currencies, 22% (previous year, 21 %) in U.S. and Canadian dollars; the re­ maining 6% (previous year, 4%) are divided between Australian dollars and Japanese yen.
Net cash deposits arising from reinsurance business In­ creased from Sw. frs. 1,245 million to Sw. frs. 1,323 million; this growth mainly reflects the expansion of business volume.
After deduction of the interest required for the Life assur­ ance and annuity fund and other technical reserves, the investment income amounted to Sw. frs. 280 million, it can not be compared with the previous year's figure which only referred to a six-month period because of the change of the balance-sheet date. The reporting year brought a substantial increase in income as a result of the considerable amount of new investments, the clearly higher level of yield for these new investments and for re­ investments and the partially more favourable conver­ sion rates for foreign currency income.
The balance-sheet value of capital market investments and real estate of Sw. frs. 3,829 million was Sw. frs. 506 million higher than that of the previous year. This increase is partly due to new investments, which were again signi­ ficant, and partly to the conversion of foreign currencies into Swiss francs, since the higherforeign exchange rates caused an increase of the book value.
The hidden surplus on capital market investments (ex­ cluding loans), i.e. the difference between book and mar­ ket value of the individual securites, rose by Sw. frs. 79 million to Sw. frs. 483 million and now amounts to 16.1 % (previous year, 15.0%) of the balance-sheet value of secu­ rities. The fact that an increase in the hidden surplus was registered despite the unfavourable development of fixed-interest securities is mainly due to large increases in share prices in the United States, although higherfor­ eign exchange rates also played a role.
Capital market investments and real estate 3,829 3,323 3,116 2,818 3,095
Net cash deposits with insurance companies 1,323 1,245 1,159 1,124 1,244
Investments in the amount of Sw. frs. 75 million (previous year, Sw. frs. 43 miiiion) are held by trustees appointed by us in overseas territories.
Distribution of Capital Market Investments and Real Estate in Percent at Balance-sheet Values (Previous year in parentfieses)
Distribution of Capital Market Investments and Real Estate in Percent at Market Values (Previous year in parentfieses)
The management expenses amounted to Sw. frs. 106.3 million, as against Sw. frs. 43.3 million in last year's shorter accounting period. Personnel costs rose by 5%, because of salary adjustments and growth in the number of staff, this rate being consistent with that of previous years. Non-personnel costs again rose substantially; this was particularly due to an increase in deposit charges for securities abroad, higher expenditure for electronic data processing, foreign business frips and offices abroad and exceptional costs in connection with the initial issue of non-voting shares.
In the year under report, the tax burden amounted to Sw. frs. 50.3 million, a rise of Sw. frs. 21 million against the former accounting period comprising six months. If the disparate periods of assessment are taken into account, the tax burden has actually fallen, the reason being to a large extent the fact that reserves on which taxes had already been paid were dissolved atterthe balance-sheet date had been moved.
Currency 31/12/80 31/12/79 30/6/79 30/6/78 30/6/77 1980 30/6/77 to 31/12/80 * Rates in Swiss francs for 100 units of currency
Last year's General Meeting confirmed ttie re-election of Messrs. Hans Bütiimann and Marcel Odier for a further four-year term of office and, in view of the prevailing age limit, the re-election of Messrs. Hans Schaffner and Max E. Eisenring for a further term of one and two years respectively.
At this year's General Meeting the terms of office of Messrs. E. Luk Keller, Hans R. Lüthy, Hans Ulrich and Heinz B. Vischer expire. Ail four gentlemen are standing for re-election.
Having reached the retirement age, Mr. Hans Schaffner is resigning from the Board, of which he has been a member since the 1972 General Meeting; four years later the Board of Directors elected him to be a member of its Committee. As a highly respected personality both in Switzerland and abroad with widespread national and international experience in many of ttie fields that are im­ portant for our Company, his activity in both bodies was particularly valuable for us. We are highly indebted to Mr. Schaffner for the great service he has rendered to our Company.
The Board of Directors will recommend to this year's General Meeting the election to the Board of Mr. Franz
Luterbacher, Zumikon, Chairman of the Board of BBC, Brown, Boveri & Co., Ltd., Baden.
On 31st December, 1980, Mr. Martin Imbach, Assistant Manager, left our Company to assume a new position with one of our Group companies. At the end of June, 1981, Mr. Egon Ritter, Assistant Manager, transferred to the Swiss insurance Training Centre, Zurich, which is affiliated to the Swiss Re; we should like to thank both gentlemen for their many years of valuable service. - On 30th June 1981, Mr. Erik Bosshardt, Manager, entered retirement. We should like to express our sincere grati­ tude to him for more than 30 years of service to our Company.
Proposal regarding the Allocation of the Net Profit cf. Profit and Loss Account (page 22) and Balance Stieet (page 25)
Dividend it ttie proposal ot ttie Board ot Directors is accepted, dividends ot Sw. trs. 100.- per share (nominal value Sw. trs. 250.-) and Sw. trs. 10.- per non-voting share (nominal value Sw. trs. 50.-, halt annual dividend) are to be paid. Coupon No. 28 ot the registered and bearer shares may be presented tor payment ot a gross amount ot Sw. trs. 100.- or, after deduction ot the Federal With­ holding Tax ot 35 %, Sw. trs. 65.- and coupon No. 28 ot the non-voting shares tor a gross amount ot Sw. trs. 10.-, or Sw. trs. 6.50 net.
Audit The Swiss Auditing and Fiduciary Company, Zurich, has examined the present Annual Statement in accordance with provisions set down by law; their report as Auditors appears on page 26.
Depreciation, fluctuations in stock exchange and foreign currency rates - 7,410,841 - 16,641,749
Balance Profit brought forward from previous year 981,958 Net Profit for the Year 76,155,861 77,137,819 73,386,958
Based on the results of our examination, we recommend that the present Annual Statement be approved.
Fidelity and Deposit Company of Maryland, Baltimore o Tudor Insurance Company, New York
Whereas the effects of exchange rates on the Group ac­ count were slight in the previous year, the rates of the Group's major currencies changed more strongly in the year under report. With the exception of the German mark, which fell marginally against the Swiss franc, the conversion rates of foreign currencies rose, some of them substantially, in 1980.
In line with the worldwide trend, non-Life insurance brought the Group as a whole a higher underwriting loss than in the previous year, while in Life assurance the underwriting profit rose slightly. - The underwriting busi­ ness of reinsurance companies again brought on the whole a negative result. Although an underwriting profit was achieved in direct insurance, it was below that of the previous year. With regard to the increased investment Income and the higher management expenses, it has to be borne in mind that the corresponding items of the pre­ vious year only applied to half a year as a result of the alteration of the balance-sheet date of the Swiss Re and the European General from 30th June to 31st December; the same applies to the tax burden.
The underwriting result of the North American Reinsur­ ance Corporation, New York, was worse than in the previous year. While the result in Property insurance weakened, mainly as a result of an accumulation of major losses, a stabilization - albeit at an unsatisfactory level was recorded in Casualty lines. Taking into account in­ vestment income, the company achieved a profit which is somewhat less than that of the previous year. The con­ tinuing heavy competition and the persistently high infla­ tion rate give no reason to expect any significant change of trend in the immediate future.
Gratifying profits were again achieved by the three Life re­ assurance subsidiary companies in North America, the North American Reassurance Company, New York, the Canadian Reassurance Company, Toronto, and the SwissRe Life insurance Company, New York. The former two companies were able to increase both the underwrit­ ing result and investment income. Moreover the men­ tioned special covers granted by the two New York com­ panies made a positive contribution to this result.
At the end of 1980 the shareholders ofthe Eos Lebensver­ sicherung AG, Munich, acquired 100% ofthe share capi­ tal of the Isaf Lebensversicherung AG, Munich; the two companies merged in spring of 1981 under the name of Vereinigte Eos-isar Lebensversicherung AG, Munich.
In the summer of 1981 the Magdeburger Rückversicherungs -AG, Hanover, which was a member of the Magde­ burger Gruppe, was sold; it is, however, still included in the 1980 Group account.
In the year under report the Tudor Insurance Company started business and achieved on the whole a positive result.
strengthen the company's capital funds. Exchange-rate fluctuations only had a minimal effect on dividend pay­ ments.
In the reporting year dividend payments rose by Sw. frs. 2.8 million to Sw. frs. 29.0 million. This growth is due to various causes. The dividends of certain minority hold­ ings were increased; the same applied to the dividends of the SR Beteiligungen AG, Munich, the SwissRe Holding (North America) Inc., New York, and the Australian Re­ insurance Company. Further, payments were made for the first time on minority holdings which had been acquired in the previous year or in which additional funds had been invested. Likewise a dividend was paid on newly issued shares of the Swiss-South African Reinsur­ ance Company. In contrast, the dividend payment of the European General was reduced and, in the case of the «SWITZERLAND» General, SwissRe Holding as principal shareholder waived payment of a dividend in order to
The net profit was Sw. frs. 1.8 million (previous year, Sw. frs. 2.4 million) and, together with the profit brought forward, again enabled a dividend payment of Sw. frs. 2 million to Swiss Re, Zurich.
The holding company, SR Beteili­ gungen AG, comprises the Swiss Re's German insurance groups, the Magdeburger Versicherungsgruppe and the Vereinigte Versicherungs­ gruppe.
Audatex Deutschland Datenver­ arbeitungs-GmbH assesses objec­ tively and calculates exactly the vehicle repair costs using the latest organizational and electronic aids (EDP).
1, 2 Office building of Bavarian Reinsurance Company, Munich 3 Office building of Audatex Deutschland DatenverarbeitungsGmbH in Minden 4 The Audatex method - schematic diagram of a small truck 5 The new head office of the Vereinigte Versicherungsgruppe, Munich, under construction (summer of 1981)
Commissions, profit commissions, underwriting expenses 1,129 537 1,666 1,493 Claims paid 2,267 1,535 3,802 3,181 Adjustment in outstanding claims reserve 471 93 564 724 Result from all classes excl. Life -108 6 -102 - 56
Further income investment and othier financial income (less interest on Life and Sickness assurance and annuity fund and other technical reserves) 492 100 592 401
All classes excl. Lite (incl. valuation of Sickness insurance) Lite business (policy and annuity valuations)
All domestic and foreign companies In which Swiss Re, Zurich, directly or indirectly maintains a majority holding were included In the consolidation. In the reporting year the scope of consolidation was extended by Inclusion of holdings in the Tudor Insurance Company and the mh Bausparkasse AG, both acquired in the previous year. The figures of the former are included under reinsur­ ance, those of the latter under Insurance. The degree of holding with all consolidated Group companies Is be­ tween 55% and 100%; however, the 50% holding In the Fidelity and Deposit Company of Maryland acquired in 1980 is not consolidated. Assets and liabilities and outgo and income of the companies Included In the consolida­ tion are shown at 100%; the share applicable to minority shareholders was deducted from the capital funds and profit and shown as separate items.
"Non-consolidated holdings" refers to holdings of 50% or less In Insurance and reinsurance companies.
In the year under report the consolidated capital funds of the Group rose by Sw. frs. 159 million to Sw. frs. 824 mil­ lion. The reasons for this increase are, on the one hand, the non-voting share capital Issued in the year under report by Swiss Re, Zurich, and, on the other hand, the in­ crease in the capital funds achieved within the Group. Changes in the consolidated capital funds are shown In the following table: Change in Group Capital Funds in millions of francs
Effects of exchange rate fluctuations on opening balance-sheet figures 22 - 3
Group Balance Sheet in millions of francs 31/12/80 31/12/79 30/6/79 30/6/78 30/6/77
Capital funds (prior to distribution of profit) 824 665 622 550 555
^ not comparable with the reporting year foiiowing change in balance-sheet date of Swiss Re, Zurich and European General
«SWITZERLAND» General Insurance Company Ltd. Gotthardstrasse 43, CH-8022 Zurich with branch offices in Barcelona, Brussels, Genoa, Hamburg, Melbourne and Montreal SWITZERLAND General Insurance Company (London) Ltd. Tower House, 38 Trinity Square, London EC3N 4HR SWITZERLAND General Insurance Corporation of New York 102 White Plains Road, Tarrytown, N.Y. 10591
Magdeburger Union Rechtsschutz Versicherungs-AG Kirchhorster Strasse 2, D-3000 Hanover 51 Union und Rhein Versicherungs-AG Wotanstrasse 88, D-8000 Munich 19
Audatex Ltd. Mythenquai 50/60, CH-8022 Zurich Audatex Deutschland Datenverarbeitungs-GmbH Kuhlenstrasse 15, D-4950 Minden mh Bausparkasse AG Wotanstrasse 88, D-8000 Munich 19
North American Reassurance Company 100 East 46th Street, New York, N.Y.10017 with branch offices in Chicago, Dallas and Lakewood (Colorado)
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, Denver, Houston, Los Angeles, Philadelphia, San Erancisco and Seattle
Canadian Reinsurance Company 95 St. Clair Avenue West, Toronto, Ontario M4V 1N9 with branch offices in Montreal and Vancouver
SwissRe Advisers Ltd. 2306-2309 Connaught Centre, Hong Kong with an office in Manila: SwissRe Advisers Ltd. Manila Doha Narcisa Building, Room 703 8751 Paseo de Roxas, Makati, Metro Manila
Swiss Reinsurance Company Representative Office Tokyo 2-9, Nihonbashi 3-chome, Chuo-ku Sansho Building, Tokyo 103
GEATEC Venezuela C.A. Edif. Seg. Adriatica, Piso 7 Gf. 72, Avda. Fco. de Miranda con Don Bosco, Caracas
Compania Suiza de Reaseguros Gficina de Asesoria Tecnica Carrera 7a, No. 26-20, Piso 25, Bogota