News Analysis - Hitting out against the hearsay.

(From Reinsurance)

Byline: Adrian Leonard.

Warren Buffett recently alleged that "one of the world's largest reinsurers has all but ceased paying claims". Was it a reference to Swiss Re? The rumours are thick, but evidence is thin. Swiss Re is contesting the application of the two-event theory to the World Trade Centre (WTC) claim, but everyone except those blinded by patriotic indignation sides with Swiss Re (including, now it appears, the courts). Swiss Re's ongoing dispute with Lloyd's over the Central Fund reinsurance is less clear cut.

Other contested claims have been cited, such as Swiss Re's reluctance to pump $55m into Trenwick under an old catastrophe equity put. However, no-one has come forward with concrete evidence of widespread claims-paying malaise to back up the allegations.

The rumours began in October 2002, when Richard Murray was appointed Swiss Re's chief claims strategist. A lawyer with broad experience, he once headed Minet. Walter Kielholz said creating the job met the "increasing need for more comprehensive claims handling around the world", but critics said it heralded a change in claims strategy.

The rumours culminated at a Monte Carlo press conference in September when Swiss Re chief executive John Coomber made an angry denial of any change in conduct. He pointed to SFr 20bn ($15.07bn) in claims payments in 2002, and the absence of official complaints from clients and brokers.

He shouted that he is tired of the rumours, and declared the London market responsible for starting and spreading them. Later a Swiss Re spokesman insisted: "Nothing has changed. There is nothing more to be said than has already been said."