Swiss Re also blamed other events for last year’s large losses, including the collapse of Enron and the tropical storm Allison. Swiss Re said limited new capital entered the market relative to losses, but it reported increased demand for reinsurance cover. The company reduced its future return on investment target from 7% to 6.7%.
The warning comes just a few days after Swiss Re called on governments to form public/private partnerships to tackle future terrorism insurance. Swiss Re said: “Terrorism risks meet fewer of the important criteria of insurability, particularly as it is impossible to accurately assess the probability and severity of terrorist attacks."