Swiss Re turns to Warren Buffet for fresh cash
Issued on: Modified:
World's second-largest reinsurance company Swiss Re said it expects a record loss of 672 million euros in 2008, while it turns to Warren Buffet's Berkshire Hathaway for another two billion Swiss francs to prevent a downgrading of its current rating.
AFP - The world's biggest reinsurer Swiss Re said Thursday it expected to post net losses of one billion Swiss francs (860 million dollars, 672 million euros) in 2008, as it turned to Warren Buffett's Berkshire Hathaway for fresh capital.
Berkshire Hathaway injected three billion francs in the reinsurer while the group said another two billion Swiss francs may be raised from shareholders to prevent a downgrade of the reinsurer's current rating.
"The Group has surplus regulatory capital, but it estimates that at 31 December 2008 it was between 1.5 and 2.0 billion francs below the level required to maintain its current 'AA' rating," it said in a statement.
"The Board of Directors has concluded that it is in the best interest of the Group to seek to re-establish a strong level of capital. Based on current estimates, the total amount of capital to be raised is likely to be up to 5.0 billion francs," added the reinsurer.
Swiss Re chief executive Jacques Aigrain said he was "disappointed" with the results but added that the company's core insurance businesses are "doing well."
Daily newsletterReceive essential international news every morningSubscribe