Swiss Re loses $781 million on credit default swaps
ZURICH - Swiss insurer Swiss Re has announced the loss of Sfr819 million ($781 million) on two portfolio credit default swaps (CDSs) in its Q1 results for 2008, warning it is likely to lose a further Sfr200 million on the trades. The affected contracts included exposure to US subprime mortgages and were responsible for a Sfr1.2 billion loss at the insurance firm in November 2007. The total cost of the affected trading portfolio is now more than Sfr2 billion. Swiss Re said the positions were still in run-off, implying it is still exposed to assets already in the underlying portfolio but will not take exposure to new assets.
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