Reinsurance giant Swiss Re took dividends of €150 million from one of its main units in Ireland last year, new accounts reveal.
The dividend from Swiss Re Ireland, which employs 16 staff, was more than five times bigger than its pretax profit of €27 million in 2005. With an office at Fitzwilliam Square in Dublin, the unit books reinsurance contracts from Swiss Re's operations throughout Europe.
Swiss Re was one of several major reinsurance players in the international market to locate business in Ireland, where the regulatory regime and low corporate tax rate are considered attractive.
The accounts for Swiss Re Ireland indicate that its Zurich-based parent moved late last year to expand its operations in Ireland with expenditure of €74.1 million on two acquisitions of Dublin-based reinsurers.
The group spent €41.8 million buying Dortmund Reinsurance Ireland and €32.3 million buying International Mutual Reinsurance Company Ireland. Both transactions were executed on November 30th.
Swiss Re Ireland's profit last year marked a return to the black after pretax losses of €29 million in 2004.
"This increase relates to the adverse development experienced in one reinsurance treaty in 2004; no adverse development was experienced in 2005," the accounts said.
While the unit paid out no dividend in 2004, it made a payment of €24 million on December 8th last year and made a further payment of €126 million four days later.
Such payouts contributed to a significant decline in value of the unit's balance sheet, whose total assets fell to €799 million at the end of 2005 from €955 million in 2004 after a decrease on the 2003 figure.
"This decrease has been primarily concentrated in other financial investments which has decreased from €869 million to €716 million due to cash outflows to satisfy dividend payments to the shareholder in December 2005," said the accounts.
Separate filings for another Swiss Re subsidiary in Ireland - Swiss Re Life & Health (Ireland) Ltd - indicate that it recorded a loss of $68.17 million (€54.47 million) last year after losses of $18.08 million in 2004.
This business concentrates on two reinsurance treaties in 2001 with Lincoln National Life Insurance Company and Lincoln National Reinsurance Company (Barbados).
