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Swiss Re First-Quarter Profit Climbs 54%

By AFX
Tuesday, 8 May 2007 | 3:32 AM ET

Swiss Re reported a consensus-beating first quarter net profit of 1.3 billion sfr, a 54% increase over the year-earlier period, due to a continuing good performance across all business segments.

Analysts polled by Thomson Financial News forecast net profit of 845 million sfr -1.408 billion sfr, or 1.129 billion on average.

It also confirmed its target of EPS growth of 10% and a return on equity of 13% over the current business cycle.

During the first quarter, the reinsurance group's return on equity improved to 17.1%, from 14.1%, while EPS increased by 38% to 3.85 sfr.

The group's premium income also increased 23% to 8.1 billion sfr, benefiting significantly from the integration of General Electric's Insurance Solutions business, while its combined ratio stood at 94.8%.

Premiums were expected to come in at 8.027-10.150 billion sfr, or 8.656 billion on average, while the combined ratio was seen reaching 90-99%, or 96% on average.

In parallel, shareholders equity decreased 1% to 30.4 billion sfr, due to the commencement of a 1.7 billion sfr share-buyback programme.

The group's investment result was 2.3 billion sfr, a 44% increase over last year, benefiting from effective protection of its equity position during the market downturn in March.

The return on investment improved to 5.9% from 5.4%, while net realized gains increased by 61% to 445 million sfr, mainly due to equities and the sale of its London 'Gherkin' office building.

Swiss Re's property and casualty continued its strong performance despite European winter storm Kyrill, with premiums up 18% at 4.6 billion sfr.

Operating income was up 4% at 1.2 billion sfr.

It's Life & Health operating revenues increased 26% to 4.4 billion sfr, while the operating income of its financial services unit increased 209% to 235 million sfr.

The Swiss reinsurance group had reported first quarter earnings for the first time.

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