Swiss Re in Record Loss; Seeks to regain AA Rating

Swiss Re books FY loss, seeks to regain AA rating: "Swiss Re (RUKN.VX: Quote, Profile, Research) said it aims to regain a higher capital base in the long-term, as it posted slightly better full-year numbers than anticipated and put a large rights issue on the backburner.

The decision to shelve the rights issue, announced on Thursday, effectively means a return to Swiss Re's previous AA rating is out of the question for the time being.

The world's second-biggest reinsurer can now concentrate on generating returns in the shorter term, rather than raising further capital from disgruntled shareholders.

'The downgrade frees up precious capital which could help to unwind the problematic structured product portfolio and support the new CEO in achieving his demanding target,' said Kepler Capital Markets analyst Fabrizio Croce.

'We think it would be an error in this environment to stop raising further capital. We were strong believers in the need for at least 5 billion Swiss francs,' Croce said.

The company, which is disbanding its troublesome financial markets operations, has suffered massive writedowns on risky assets and has had to shore up its capital base with an investment from Warren Buffett. [ID:nL571925]

Writedowns and capital concerns have wiped off more than half the stock's value in 2008, far behind Munich Re (MUVGn.DE: Quote, Profile, Research), the world's largest reinsurer, and Hannover Re (HNRGn.DE: Quote, Profile, Research).

Swiss Re said it made a 2008 net loss of 864 million Swiss francs ($735.3 million) and its shareholders' equity was 20.5 billion Swiss francs at end-2008 -- both slightly better than its preliminary estimates."

Source: Reuters

Swiss Re to cut bonus pool by 50%

Swiss Re to cut bonus pool by 50%: "wiss Re is to cut its bonus pool by 50% after the Swiss reinsurer battled heavy investment and catastrophe losses during 2008, Reinsurance has learned.

In a memo seen by Reinsurance, Swiss Re's chief executive Stefan Lippe said: 'I would also like to give you some information on the compensation situation. The underlying principle is that Swiss Re rewards for performance and the reward is discretionary. Also when times are tough we have levels of achievement where recognition and performance-related compensation are appropriate and deserved. That said, it should come as no surprise when I say that the overall compensation pool has been significantly reduced and reflects our company's performance...... Moreover, we will streamline and improve efficiency.'

Swiss Re admitted that the bonus pool would be cut, saying: 'The overall bonus pool will be cut by around 50% compared with last year, reflecting the company's overall performance. But despite the difficult year, discretionary individual incentives will be paid, based on each person's performance.'"

Source: Post Online

A.M. Best Revises Outlook to Stable for Korean Reinsurance Company

A.M. Best Revises Outlook to Stable for Korean Reinsurance Company: "A.M. Best Co. has revised the outlook to stable from positive and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of ?a-? of Korean Reinsurance Company (Korean Re) (South Korea).

The ratings reflect Korean Re?s sound asset portfolio, dominant market position in the Korean reinsurance industry and strengthening underwriting guidelines for its overseas business. The revised outlook reflects the deterioration of risk-based capitalization in fiscal year 2007 and the first half of fiscal year 2008.

Korean Re maintains a conservative investment strategy, and most of its invested assets are concentrated in fixed income securities with high credit quality. Because of this, net investment yield has been very stable at 4%-5% over the last five years. As the company was able to grow its invested assets over the last five years, the compound annual growth rate of investment income was 19% during this period with no yearly decline. The investment income for fiscal year 2007 was KRW 110 billion (USD 109 million)."

Source: Best via Trading Markets

Platinum Underwriters reports drop in Q4 earnings

Platinum Underwriters reports drop in Q4 earnings: "Platinum Underwriters Holdings has reported a net income of $64.05 million, or $1.18 per diluted share, for the fourth quarter ended December 31, 2008, compared to $102.19 million, or $1.60 per diluted share, for the fourth quarter ended December 31, 2007.

Total revenue for the fourth quarter of 2008 was $359.51 million, as compared to $355.34 million for the corresponding quarter of 2007. For the fourth quarter of 2008, net premiums earned decreased to $274.24 million from $302.01 million for the same quarter of 2007.

Net income was $226.2 million, or $3.98 per diluted share, for the year ended December 31, 2008, as compared to $356.98 million, or $5.38 per diluted share, for the year ended December 31, 2007.

For the year 2008, total revenue was $1.33 billion, compared to $1.38 billion for the year 2007. Net premiums earned for the year 2008 were $1.11 billion, as compared to $1.17 billion for the year 2007.

Total assets were $4.93 billion as of December 31, 2008, a decrease of 3% from $5.08 billion as of December 31, 2007. Shareholders' equity was $1.81 billion as of December 31, 2008, a decrease of 9.5% from $2 billion as of December 31, 2007."

Source: Insurance Business Review

Lloyd’s Charities Trust donates £25,000 to Victorian Bushfire Appeal

Lloyd’s Charities Trust donates £25,000 to Victorian Bushfire Appeal: "Lloyd’s Charities Trust today announced that it will donate £25,000 (about A$55,000) to the Australian Red Cross’ Victorian Bushfire Appeal, the fund set up to help victims of the recent wildfires.

The money will go towards providing assistance to individuals and communities in towns and suburbs affected by the bushfires.

Graham White, Chairman of Lloyd’s Charities Trust, said: “The devastation wreaked by the recent wildfires in Australia is a terrible tragedy for Melbourne businesses and communities. We hope that this donation will go some way to help the efforts to rebuild the lives of those affected.”"