REINSURANCE GIANT Swiss Re is poised to realise €241 million from a voluntary liquidation of a profitable Dublin-based subsidiary which was formerly controlled by the GE group.
The liquidation had "absolutely no bearing" on its commitment to its Irish clients, Swiss Re said yesterday, adding that it would continue to maintain a presence in Ireland. The development was part of a restructuring of its European legal entities, a London-based spokesman said.
The division in question is Swiss Reinsurance Ireland, formerly known as GE ERC Strategic Reinsurance. Swiss Re acquired this business in 2006 when it bought out GE Insurance Solutions Corporation in a $7.4 billion (€5.11 billion) deal.
This company realised an after-tax profit of €39 million in 2006, the most recent period for which accounts are available. Last year it paid a dividend of some €170 million to its parent in Zurich, a sum that represented profits accumulated in the course of its trading in previous periods.
According to Swiss Re's spokesman, some €241 million in surplus capital will be returned to the parent organisation as a result of the liquidation. That sum represents €212 million in "unpaid" share capital and €30 million in "paid up" capital.
"This liquidation is part of an ongoing restructuring of Swiss Re's legal entities in Europe, a process first announced in March 2007 and one that has been well publicised among those operating in Ireland's insurance markets," the spokesman said.
When this process was initiated Swiss Re said that it could make savings of up to SFr500 million (€312.11 million) by forming three new legal entities in Luxembourg as risk carriers for most of its European insurance business. The consolidation of these operations would significantly simplify the group's legal structure, Swiss Re said then.
"All along, we have been keen to stress that this is a technical restructuring, designed to improve the overall capital efficiency of Swiss Re's EU operations," the spokesman said.
"It has absolutely no bearing on our commitment to reinsuring our Irish primary insurance clients, who will continue, as before, to be reinsured by the UK branch of our EU business.
"Further, Swiss Re continues to maintain a presence in Dublin: people at our Fitzwilliam Square office continue to be engaged in certain operations for Swiss Re, along with those working for Conning Asset Management, a subsidiary of Swiss Re." Another Swiss Re subsidiary - Swiss Re Ireland - went into voluntary liquidation last September with estimated surplus assets of €95.7 million.
