Rating agency Fitch has affirmed its insurer financial strength (IFS) rating of Swiss Reinsurance Company (Swiss Re) and rated subsidiaries at 'AAA'. The ratings are removed from its negative rating watch status, which was placed on September 21, 2001. The rating outlook is stable.
The rating action follows a review of the exposure to the losses from the September 11 attacks.
Net losses after tax have risen 35% (in dollar terms) from the initial estimate announced on 20 September 2001 and exchange rate movements have pushed the Swiss franc loss to 45% higher than the initial estimate. The losses now stand at $3.21bn (£2.25bn) gross, $1.75bn (CHF2.95bn) net of tax and reinsurance recoveries.
The group successfully raised a total of $3.6bn (CHF6.0bn) in equity and equity-linked capital in the fourth quarter of 2001, partly to finance the acquisition of Lincoln Re, at a cost of approximately $2bn.
According to Fitch, the remaining capital raised will replenish the majority of the capital lost through the World Trade Centre attack. Fitch expects the group's overall capital position to be marginally weaker as a result of declining asset values during 2001 and the impact of major losses during the year.
However, the overall capital position of the group will remain very strong and commensurate with the current rating level.
