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Swiss Re draws $300m cost cutting plan

Swiss Reinsurance (Swiss Re) has underlined a $250m to $300m cost cutting strategy, which will be achieved by 2015, as the company gears up to improve profitability and increase dividend.

The savings will be reinvested to high growth insurance and reinsurance markets that provide attractive financial returns, the company said in a statement.

It has also planned to decrease debt by more than $4bn by 2016, in a bid to maximize group return on equity (ROE) and to implement this plan, a Swiss Re subsidiary will launch a tender offer to repurchase three tranches of its senior debt.

Swiss Re Group CEO George Quinn said that strong capital position enables the firm to benefit from profitable business growth opportunities.

Besides shifting corporate debt and cutting down on government bonds, the company will form a new organizational set up for its Life & Health (L&H) Reinsurance business, which is expected to yeild ROEs of 10%- 12% by 2015.

The near-term management actions are expected to reduce earnings of L&H Reinsurance by approximately $500m before tax in 2014.

Established in Zurich, Switzerland, in 1863, Swiss Re serves clients through a network of over 60 offices across the world, and caters reinsurance, insurance and other insurance-based forms of risk transfer.