Net profit at Swiss Re fell 41 per cent in 2005 as the cost of natual disaster claims hit home.
Swiss Re, which is the world's second-largest reinsurer by market value, saw its net profit slump to 1.45 billion Swiss francs ($1.1 billion) after the US
hurricane season hurt its non-life reinsurance units. The company said it had to pay three billion francs in large natural catastrophe claims.
The firm also said today that its combined ratio, a key profitability gauge, rose to 108.7 per cent. The higher the ratio stands above 100 per cent, the bigger an insurer's underwriting loss.
Despite the drop in net profit, Swiss Re said it would raise its dividend to 2.50 francs per share from 1.60 francs per share paid for 2004.
Premiums earned declined by a bigger-than-expected 6 per cent to 27.8 billion francs, as the group refrained from underwriting business at too low prices.
Swiss Re's investment result increased 11 per cent to 6.6 billion francs for a 5.7 per cent return on investment.
Swiss Re won approval at a shareholders' meeting on Monday for a $7.5 billion capital-raising exercise to finance the group's acquisition of the reinsurance units from General Electric.
The purchase, expected to close in the middle of the year, will make Swiss Re the company with the largest reinsurance premium volume in the world.