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Daily Insurance Industry News
Saturday 23rd of June 2018
September 29, 2008

Swiss Re steers safely through financial storm

by David Masters

Story link: Swiss Re steers safely through financial storm

European insurance giant Swiss Re has assured investors that its portfolio is secure despite the current worldwide financial turmoil.

The second largest reinsurer in the world announced on Thursday that it is on track to meet its targets, and that write-downs from the credit crunch have been lower than expected.

The company added that it will be taking further steps to protect shareholders by selling off more of its risky investments and reducing exposure to corporate bonds, equities and structured assets.

Targets of 10% per share growth and 14% return on equity were confirmed by the company.

Shares in Swiss Re rose 3.8% in the morning following the announcement.

However, analysts have warned investors to be cautious, with a reminder that a number of write-downs are still likely for Swiss Re, and that the hurricane season is yet to come.

Munich Re is being seen as a more secure investment for those wishing to put their money into European markets, as it has a smaller exposure to the credit crunch and a more diversified investment portfolio.

European insurance companies are expected to profit from the US government rescue of American International Group (AIG) when assets from the company go up for sale at knock down prices.

Furthermore, the break-up of AIG will reduce competition and increase profit margins.

 

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