Swiss Re upbeat despite loss

ZURICH, Switzerland -- Swiss Re, the world's second largest reinsurer, says the September 11 attacks contributed to a net loss of 165 million francs ($99 million) last year.

It was the company's first loss for more than 130 years, but Wednesday's figures for 2001 were better than it had expected and it predicted a return to profit this year.

"Swiss Re strengthened its competitive position in 2001 and is confident of returning to its previous strong earnings path with a sharp upturn in earnings in 2002," the firm said.

The group said rising premium rates should ensure a quick return to profit, adding that it could meet analysts forecasts of 3.6 billion francs in net earnings for 2002.

"I can't rule that out, it would be within the realm of possibility,'' Chief Financial Officer John Fitzpatrick told Reuters.

Insurance claims linked to the terrorist attacks in the U.S. contributed to the firm's losses in 2001.

In February, Swiss Re raised its estimate of insurance losses from the destruction of the World Trade Center to 2.95 billion francs from a previous forecast of 2 billion francs.

Swiss Re has suffered along rivals such as industry leader Munich Re from the attacks. For the industry as a whole, the WTC losses are estimated at $50 billion -- making 2001 the most expensive year on record for insurers.

The group's net premiums rose by 14 percent to 25.2 billion francs in 2001.

Operating income in the property and casualty business fell by 87 percent in 2001, while operating profit in the life and health operations rose by 16 percent.

Swiss Re said the return on its investment portfolio of close to 100 billion francs was eight percent, exceeding its own seven percent target.

The group will keep its dividend unchanged at 2.50 francs per share.

Swiss Re shares rose 3 percent to 165.25 francs in late trading on Wednesday in Zurich.