Swiss Re posted a higher-than-expected net profit of 1.70 billion Swiss francs ($1.34 billion) in 2003 amid strong demand for property/casualty reinsurance and issued a bullish outlook today.
The world's largest reinsurer also raised its dividend to 1.10 francs a share from 1 franc on 2002 results as it bounced back from a 91 million-franc loss in 2002 after lower investment income and losses on invested assets.
Shares were up 4.6 per cent at 87.50 francs in early trading, as the overall Swiss market rose just under 1 per cent.
The stock has been hovering around last year's close, having pared gains as worries flared about the sector's exposure to large claims in the wake of recent train bombings in Spain.
The firm said it was off to a good start in 2004, adding conditions remained strong in the reinsurance industry, driven by strong demand for risk cover from client insurers.
Swiss Re adjusted its near-term targets upwards, signalling that although premium income growth might slow in the next three years, it expected profitability to rise on the back of better non-life results and higher investment returns.
The firm said premium growth was likely to slow but made clear it still expected to improve profits by setting a tougher target for its combined ratio of 96 per cent from 98 per cent.