2008 was a difficult year…

Summary of the results announced by the main insurance companies operating in Switzerland: Helsana, ZFS and SwissRe.

• Insurance premiums collected were up 1.8% at 5.44 billion francs
• Insurance expenditure was up 8.3% at 4.99 billion francs
• The combined ratio (the ratio between the cost of insurance claims and insurance premiums collected) deteriorated from 99.3 to 102.8%
• The group had a negative return, with a loss of 215 million francs (compared with profits of 97 million francs in 2007)
• Shareholder equity was down 21% to 816 million francs
• The group made losses of 229 million francs on financial investments (reserves), versus profits of 227 million in 2007
• Because of the competition on the Swiss market, the fall of the group’s reserves below the minimum legal level and a dramatic rise in costs, the group will not distribute any dividends to shareholders or bonuses for 2008

• Insurance premiums collected (gross)
  • Property damage insurance: +4% to 37.15 billion USD
  • Life insurance: +1% to 21.86 billion USD
• The combined ratio deteriorated by 2.5% to 98.1%

• Net earnings fell to 3.04 billion USD (versus 5.7 billion in 2007)
• The dividend per share paid to shareholders will be cut from 15 to 11 Swiss francs
• The group confirmed its targets for cost cutting in 2008
• S&P rating A/stable (ZFS), AA-/stable (Zurich Assurance)

• Forecast net loss of CHF 1 billion, versus profits of CHF 4.2 billion in 2007
• The combined ratio deteriorated to 97.4% versus 90.2% in 2007
• The volume of insurance premiums collected rose by 6% in 2008
• The group’s position in 2008 is due to the writing off of CHF 6 billion of toxic assets (CDS)
• The share capital was increased by 5 billion francs, including a contribution of 3 billion francs by Warren Buffet in the form of a convertible loan at a rate of return of 12% with a conversion price set at 25 francs after three years. If these rights are exercised, Warren Buffet’s company, Berkshire Hathaway, will hold 20% of SwissRe (against 3% at present)
• The group’s strategy will be reviewed – it will abandon its structured financial products activities (which led to the write-down) and refocus on its core business activities
• The rating of the group’s long-term debts was lowered by S&P to AA- and by Moody’s to Aa3 (from Aa2)
• The group’s final results will be announced on 19 February

• Helsana (28.01.09)
• ZFS (05.02.09)
• SwissRe (05.02.09)