Swiss Re takes $878M subprime hit

The October loss stems from a pair of credit default swaps written by the firm’s Credit Solutions unit.
NOV 19, 2007
By  Bloomberg
Swiss Reinsurance Co. today reported that it lost $878 million after taxes due to its subprime-mortgage exposure. The loss, which occurred in October, stemmed from a pair of credit default swaps written by the Zurich-based firm’s Credit Solutions unit. The swaps were made to protect portfolios against a risk of loss, but the mortgage crisis has made the value of the underlying assets plummet, Swiss Re said. These portfolios contained mostly mortgage-backed securities, including some exposure to subprime and asset backed securities in the form of collateralized debt obligations. Swiss Re has marked down the ABS CDOs to zero, while the subprime assets have lost 62% of their original value. The market value of the portfolio is now $5.4 billion. Still, Swiss Re will stick with its targets: a 10% rise in earnings per share and a year-end return on equity of 13%.

Latest News

Revealed: The InvestmentNews Top Advisors for 2025
Revealed: The InvestmentNews Top Advisors for 2025

Driven by long-term vision and a steadfast commitment to client service, the top-ranking advisors are reaching new heights of success.

Trepidation at SEC as Trump workforce overhaul casts shadow on agency
Trepidation at SEC as Trump workforce overhaul casts shadow on agency

While the regulator's lawyers may be exempt, a federal effort to purge workers is causing uncertainty across its broader employee base.

Prime Capital Financial, Carnegie expand Eastern footprints
Prime Capital Financial, Carnegie expand Eastern footprints

The two national RIA firms are bolstering their presence separately in Georgia and Connecticut with new billion-dollar acquisitions.

Embattled TD Bank eyes $14B raise in Schwab stake exit
Embattled TD Bank eyes $14B raise in Schwab stake exit

The banking giant is looking to sell its interest in the online brokerage giant amid the continuing fallout of its historic money-laundering settlement with federal regulators.

Next-gen woman advisor managing $200M switches from UBS to Sanctuary Wealth
Next-gen woman advisor managing $200M switches from UBS to Sanctuary Wealth

Advisor joins the Partnered Independence model for new firm launch.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.