NAIC advises how it would preliminarily classify the Swiss Re USD 750 million Hybrid Securities for purposes of statutory risk-based capital requirements of US insurance investors

11 May 2006, Zurich

Swiss Re has been advised by the Securities Valuation Office of the NAIC that it would preliminarily classify the USD 750 million Preferred Securities recently issued by Swiss Re as common equity for purposes of calculating the statutory risk-based capital requirements of US insurance companies that hold these securities.

The Offering Memorandum, dated 4 May 2006, in respect of the 6.854% Perpetual Subordinated Step-Up Preferred Securities (the "Preferred Securities") issued by Swiss Re Capital I LP, and guaranteed by Swiss Reinsurance Company on a subordinated basis, disclosed that the Preferred Securities could be classified as common equity by the Securities Valuation Office ("SVO") of the National Association of Insurance Commissioners (“NAIC”).

On 11 May 2006, the SVO advised Swiss Re that it would preliminarily classify the Preferred Securities as common equity for purposes of calculating the statutory risk-based capital requirements of US insurance companies that hold these securities.

However, the SVO will not provide an official classification of the Preferred Securities unless and until an insurance company subject to regulation by a US state insurance department purchases the Preferred Securities, reports them to the SVO and the SVO receives and reviews the final, executed documentation related to the Preferred Securities and upholds its preliminary analysis and publishes its final NAIC Designation in the Valuations of Securities CD-ROM or in some other forum that serves as the official expression from the NAIC.

Notes to editors

Swiss Re

Swiss Re is one of the world’s leading reinsurers and the world’s largest life and health reinsurer. The company operates through more than 70 offices in over 30 countries. Swiss Re has been in the reinsurance business since its foundation in Zurich, Switzerland, in 1863. Swiss Re offers a wide variety of products to manage capital and risk. Traditional reinsurance products, including a broad range of property and casualty as well as life and health covers and related services, are complemented by insurance-based corporate finance solutions and supplementary services for comprehensive risk management. Swiss Re currently has the following ratings: (i) from Standard & Poor's: long-term counterparty credit, financial strength and senior unsecured debt ratings of "AA (CreditWatch negative)", and a short-term counterparty credit rating of "A-1+", (ii) from Moody's: insurance financial strength and senior debt ratings of "Aa2" (on review for possible downgrade), and a short-term rating of "P-1" and (iii) from A.M. Best: a financial strength rating of A+ (superior) (under review with negative implications).

This announcement does not constitute an offer to sell or the solicitation of an offer to subscribe or purchase any of the securities described herein. Any such offer was made solely by means of an offering memorandum in compliance with applicable securities laws. There is no public offering of securities of Swiss Re in the United States. Any securities of Swiss Re offered and sold in the United States were not, and will not be, registered under the US Securities Act of 1933 and were not, and will not be, offered and sold in the United States, except on the basis of applicable exemptions from registration.

Cautionary note on forward-looking statements

Certain statements contained herein are forward-looking. These statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact. Forward-looking statements typically are identified by words or phrases such as "anticipate", "assume", "believe", "continue", "estimate", "expect", "foresee", "intend", "may increase" and "may fluctuate" and similar expressions or by future or conditional verbs such as "will", "should", "would" and "could." These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Swiss Re's actual results, performance, achievements or prospects to be materially different from any future results, performance, achievements or prospects expressed or implied by such statements. Such factors include, among others:

  • the impact of future investments, acquisitions or dispositions, and any delays, unexpected costs or other issues experienced in connection with any such transaction, including the ability to efficiently and effectively integrate the GE Insurance Solutions operations into our own;
  • cyclicality of the reinsurance industry;
  • changes in general economic conditions, particularly in our core markets;
  • uncertainties in estimating reserves;
  • the performance of financial markets;
  • expected changes in our investment results as a result of the changed composition of our investment assets or changes in our investment policy;
  • the frequency, severity and development of insured claim events;
  • acts of terrorism and acts of war;
  • mortality and morbidity experience;
  • policy renewal and lapse rates;
  • changes in rating agency policies or practices;
  • the lowering or withdrawal of one or more of the financial strength or credit ratings of one or more of our subsidiaries;
  • changes in levels of interest rates;
  • political risks in the countries in which we operate or in which we insure risks;
  • extraordinary events affecting our clients, such as bankruptcies and liquidations;
  • risks associated with implementing our business strategies;
  • changes in currency exchange rates;
  • changes in laws and regulations, including changes in accounting standards and taxation requirements; and
  • changes in competitive pressures.

These factors are not exhaustive. We operate in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.