November 1985 English translation of original German report; French and Spanish versions are also available.
Swiss Re, Zurich ISwiss Re Group Board of Directors, Executive Committee and Group Management, Auditors 5 iGroup Structure 32
Flans Ulrich St. Gall, Professor Emeritus, St. Gall Graduate School of Economics, Business and Public Administration 1985
A.Brügger, Senior Executive Manager D. Söhner, Executive Manager O. Kern, Manager A. Sulzer, Manager
In view of these market conditions, we in the Swiss Re Group are working in close cooperation with our clients to find ways and means of making the necessary insurance cover available to industry. However, we do not feel it is compatible with the interests of the company and its shareholders to reinsure risks if their extent can only be estimated retrospectively, often years later. The sensa­ tional escalation of the amount and frequency of losses in American Liability insurance has shown that there are non-quantifiable and erratic social risks threatening this branch, such as an excessive keenness to take legal ac­ tion, often encouraged by lawyers who claim boundless fees, a false conception of consumer protection, the ex­ tensive practice of lay juries of awarding extremely high amounts for pain and suffering and punitive damages.
In Engineering reinsurance a slight decrease in volume occurred, after premium income had remained stable over the preceding years; this is due to the fact that in­ vestment in construction and erection projects has for some years been on the decline throughout the world. The cautious underwriting policy in a smaller market paid off in a further increase in profit.
At this year's General Meeting the three-year term of of­ fice of the Swiss Auditing and Fiduciary Company, Zurich branch, expires. The Board of Directors will propose to the shareholders that the mandate be renewed for a fur­ ther three years.
Statutory reserve fund 217,500,000 127,500,000 Special reserve fund 251,000,000 229,000,000 Reserve fund for catastrophe losses 155,000,000 143,000,000
Cash deposits with ceding companies rose over the pre­ vious year by Sw.trs. 100.0 million to Sw.trs. 1,531.8 mil­ lion. More than halt ot this increase is due to higher con­ version rates tor foreign currencies.
Changes Valuation difference based on exchange rate fluctuations -L 367.3 -145.8 Increase of technical reserves in year under report -1-526.3 -L 200.5 Total business in force on balance-sheet date 7,088.9 6,195.3
The gross Life reinsurance business in force of the North American Reassurance Company, New York, the SwissRe Life Insurance Company New York, and the Swiss-Am Reassurance Company, New York, increased satisfactorily. The underwriting profit improved. Fligher in­ vestment Income contrasted with increased manage­ ment expenses and lower capital gains. The overall result amounted to LIS$ 1.3 million (previous year, LIS$ 3.5 mil­ lion). The dividend paid was LIS$ 0.9 million, the same as in the previous year.
cherung AG. The gross premiums amounted to DM 1,963.1 million. As generally observed in the market, claims payments rose. Although the investment result was even better than in the previous year, the overall result was worse and led to a reduced allocation to the reserve for policyholders' bonuses. With a profit for the year of DM 16.0 million (previous year, DM 15.9 million) the free reserves were strengthened, a dividend of DM 5.0 million (previous year, DM 4.0 million) paid and DM 3.0 million (previous year, DM 3.0 million) contributed to the outstanding paid-up capital.
The Fidelity and Deposit Company of Maryland, Balti­ more, in which the «Zurich» Insurance Company and the Swiss Re each have a 50% shareholding, is not consoli­ dated in the Group accounts. The gross premiums rose to US$ 145.2 million (previous year, US$ 122.8 million). The company achieved an underwriting result which was less than that of the preceding year. The overall result was US$ 4.5 million (previous year, US$ 14.4 million). The divi­ dend payment for 100% was increased to US$ 10.0 million (previous year, US$ 8.0 million).
The structure of the holding portfolio underwent no major changes during the year under report. In contrast the funds in company holdings rose substantially following capital Increases. The loan granted by the Swiss Re for the financing of this outgo rose accordingly, i.e. by Sw.frs. 56.0 million to Sw.frs. 497.2 million.
The profits and capital funds applicable to third party shareholders correspond to the percentage shares of non-Group shareholders in the capital funds or in the results of the relevant Group companies. The capital funds applicable to minority shareholders rose in the re­ porting year by Sw. frs. 4 million to Sw. frs. 33 million. The increase is due to the higher capital funds and to the higher valuation of the German mark. The shares of the applicable profit remained unchanged at Sw. frs. 9 million.
European General Reinsurance Company of Zurich Sw. frs. 100 75,656 1,780,974 825,581
Fidelity and Deposit Company of Maryland* us $ 50 137,378 283,174 145,199
SWITZERLAND General Insurance Company Limited Sw. frs. 99.9 79,328 950,766 655,957
• Insurance business of the calendar year 1979 and general income and outgo for the period from 1.7.-31.12.79 . •• These figures are not comparable with those of the other years as a result of the change of the balance-sheet date from 30th June to 31st December of Swiss Re,
United States Fidelity and Deposit Company of Maryland Charles and Lexington Streets, Baltimore, MD 21203 North American Specialty Insurance Company Qne Independence Place, Suite 400 4807 Rockside Road, Cleveland, QH 44131
Switzerland Audatex AG Gotthardstrasse 35, GH-8022 Zurich Prudentia Services Ltd. Mythenquai 50/60, CH-8022 Zurich
Ceding company: The insurer which cedes (passes on) ^ risks to the ^ reinsurer.