Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Swiss Life Battered After $380M Error

ZURICH, Switzerland -- Insurer Swiss Life restated its first-half 2002 results Monday to show a wider net loss after discovering it had miscalculated the value of bonds, the second embarrassing error in a month.

Its hard-pressed stock fell 11.5 percent to 150 Swiss francs in early trading after Switzerland's largest life insurer said its first-half net loss was actually 578 million Swiss francs ($382.8 million) -- 192 million francs greater than was first reported.

The mistake further dented the cash-strapped firm's credibility ahead of a planned 1.2 billion francs rights issue of new stock, vital to rebuild the firm's battered finances.

"It is terrible," said one analyst at a Swiss bank. "They said [after the last restatement] this would never happen again and it shows you the whole thing is a mess."

Swiss Life had restated first-half 2001 earnings last month to show a net loss of 1 million francs, rather than a profit of 253 million after it misinterpreted the value of shares in its portfolio.

"This is the second time in a row and it doesn't increase trust in their accounting processes," said another analyst.

Company officials told reporters in a conference call that there was no connection between the errors and said controls would be beefed up in future, with first-half figures being made subject to a review similar to that for full-year results.

"The new reporting error is very regrettable," chief executive Roland Chlapowski said in a statement. "It reveals weaknesses in the project management in implementing the new securities administration system."

The system was installed early this year but was not functioning properly, the company said. The error had since been fixed.

Auditors Pricewaterhouse Coopers detected the error while reviewing Swiss Life's results, it said, adding it would strengthen its internal controls and accounting team under Bruno Pfister, who became chief financial officer in mid August.

The error does not affect the group's total equity or its plans to raise fresh capital, it said.

Swiss Life, hit like other insurers by the rout on equity markets this year,intends to raise up to 1.2 billion francs as it reels from a soured expansion drive, slumping share prices and the cost of meeting fixed-return guarantees it cannot now afford.

Its shares have fallen by more than three quarters this year.