Friday 23 January 2009, 14:01 clock print this article [-] Text [+]
Zurich, 23 Jan (Reuters) - Rumors and speculation about possible further depreciation of non-prime loans have the shares of reinsurer Swiss Re: crash on Friday ( course). With nearly 17 percent temporarily exchange loss led to Swiss Re by far the weak overall European insurance sector, where shares of other industry giants such as Allianz (Course) or ING (Course) slipped deep into the red. The number two of the reinsurance industry this year has already lost 40 percent of its stock market value, while the corresponding European sector index plummeted about 20 percent. Around eight billion francs have been dissolved for Swiss Re's shareholders in nothingness.
"Swiss Re suffers from the rumors that had to be written off in the BBB-billion portfolio," said a stock trader in Zurich.
In addition to the speculation about possible further depreciation of the bond portfolio also did rumors that a British insurer Swiss Re had assured failure. A Swiss Re spokeswoman would not comment on market rumors, as always.
"This allows Swiss Re to investors in the dark and that is poison for the course," said one trader.
Swiss Re had assured recently in November, the corporate bond portfolio - almost 32 billion francs at the end of September - was covered in full. And the structured credit business, insurance is in liquidation, after the company had to write off three billion francs so far for such portfolios.
A trader in Frankfurt, analysts pointed to a critical study of dramatic losses of hybrid bonds, ie unsecured risky securities whose failure to subscribers total losses are expected. Some analysts say insurers have those papers in the portfolio. In New York, the shares of the insurer Aflac (AFL.N: Course) crashed 37 percent to 22.90 dollars after Morgan Stanley warned analyst Nigel Dally in front of a steep fall in prices of such securities. Aflac consider such papers in a volume of 7.9 billion dollars, which were mostly issued by European financial institutions, estimated Dally.
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