ZURICH (Bloomberg) ? Swiss Reinsurance Co. may release reserves ?over time? to bolster profit, after the world?s largest reinsurer put more money aside than needed to cover claims.

?Given the size of Swiss Re?s reserves and the substantial improvement in the quality of the business between 2002 and today we believe there is scope for positive reserve development,? Chief Financial officer Ann Godbehere said yesterday. She declined to say how much may be added to profit.

The Zurich-based reinsurer, which had 80 billion Swiss francs ($64 billion) in reserves at the end of the first half, is benefiting from a dearth of claims related to natural disasters a year after Hurricane Katrina.

Customers? claims for property and casualty damages are at the lowest level in ten years when measured against the company?s reserves, Godbehere said.

In the ten years through 2005 Swiss Re put aside 1.08 billion francs more than it needed to cover claims, according to slides posted on the company?s website for an investors? meeting hosted in Zurich to explain its shift to US accounting rules.

Net income last year was 59 percent higher under the new rules, primarily because of foreign exchange adjustments, the company said. Net income was 2.3 billion francs compared with the 1.45 billion francs reported in March using Swiss rules.

?The adjustments are larger than expected,? said Georg Marti, an analyst at Zuercher Kantonalbank in Zurich.

Still, the new accounting method ?doesn?t change the economic reality? of the company.

?One negative aspect is that in the future there may be more volatility in earnings,? he added.

Swiss Re shares rose 2.1 francs, or two percent, to 105.2 francs by 10.29 a.m. in Zurich, taking this year?s gain to 9.4 percent. Munich Re, the world?s second largest reinsurer has advanced 8.5 percent.

Swiss Re has a market value of 39.4 billion francs.

The company?s 2005 return on equity was revised to 9.8 percent from 6.7 percent.

Godbehere said the adjustment won?t prompt the company ?at the present time? to revise its goal of a 13 percent return on equity.

?The US dollar, between the end of 2004 and 2005 strengthened significantly and more of that gets recognised under US GAAP than Swiss GAAP,? Godbehere said on a call with reporters.

Shareholders? equity at the end of 2005 was adjusted to 24.3 billion francs from 22.9 billion after the company changed the way it accounted for fixed income securities.

Swiss Re in June surpassed Munich Re as the largest reinsurer after its purchase of General Electric Co.?s Insurance Solutions for $7.4 billion.

The unit added an additional $6.2 billion in annual premiums, as well as 2,500 employees.

The company today said it was ?comfortable with the overall level and quality of the Insurance Solution reserves?.