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US hurricanes take toll on Swiss Re profits

SwissRe, which is set to become the world's biggest reinsurer after the $7.6bn (£4.3bn) purchase of GE's reinsurance business, yesterday posted a 41% decline in 2005 net earnings because of record costs imposed by US hurricanes.

The group, which paid out Sfr3bn (£1.3bn) in natural disaster claims, saw earnings drop to Sfr1.45bn and its shares fall as it also lost money on its underwriting business.

SwissRe, which expects more consolidation in the industry, plans to raise the dividend from Sfr1.60 to Sfr2.50 despite the larger-than-expected fall in profits and higher costs.

Guardian Unlimited © Guardian Newspapers Limited 2006