Swiss Re warns on losses

Swiss Re described 2001 as a “record year for large losses”. The Zurich-based firm said the effects of September 11 affected several business lines and led to capital market falls that negatively affected investment performance. “The extraordinary nature of the event and the complexity of the losses involved has led to uncertainties and revision of loss estimates throughout the insurance industry,” said the company.

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."

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