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Strategy sees Swiss Re losing money in Q4

SWISS Reinsurance Co, the world's second-biggest reinsurer, posted a fourth-quarter loss of 1.75 billion Swiss francs (US$1.49 billion) after a failed effort to boost earnings with sales and trading of securities.

The loss compares with net income of 170 million francs reported a year earlier. The full-year loss was 864 million francs, Zurich-based Swiss Re said in a statement yesterday.

Swiss Re said its funding requirements will rise by US$1.5 billion after Standard & Poor's lowered its debt rating on Wednesday following the losses.

The firm this month turned to Warren Buffett's Berkshire Hathaway Inc for 3 billion francs of capital and parted with Chief Executive Officer Jacques Aigrain, whose strategy of trading stocks led to the record losses, Bloomberg News said.

"The capital measures will surely have a massive dilutive effect," Thomas Noack, an analyst at WestLB Equity Markets in Dusseldorf, wrote in a note to investors on Wednesday. The loss is "surely driven by huge unrealized mark-to-market movements."


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