Best Comments on Swiss Re Results

March 2, 2007

A.M. Best Co. has commented that its ratings for Swiss Re and its rated subsidiaries remain unchanged following the publication of its 2006 consolidated results (See IJ web site March 1).

Best noted Swiss Re’s “post-tax profit of CHF 4.6 billion (USD 3.8 billion) for 2006. All three business segments (property/casualty, life/health and financial services) contributed to earnings, although property/casualty was the largest generator of profits.”

Swiss Re also improved its combined ratio for its “traditional property/casualty business by 23.7 percentage points to 90.4 percent,” primarily due to the “benign catastrophe season.” However, Best noted that “more significantly” the improvement also resulted from “overall attractive pricing conditions and a substantially better underwriting performance of Swiss Re’s liability portfolio.”

In Best’s view, Swiss Re’s risk-adjusted capitalisation “remains supportive of the current ratings despite the proposed CHF 3.4 (USD 2.79) dividend per share and the planned buy back of shares currently held by General Electric (GE).”

Best said it “expects Swiss Re’s risk-adjusted capitalisation to be maintained at a level commensurate with its ratings, factoring the proposed share buy back programme of up to CHF 4 billion (USD 3.3 billion) over the next three years.”

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