Swiss Re posted a surprise second-quarter net loss on Wednesday as charges on corporate bond hedges, securitised products and its own credit spreads ate up healthy operating returns.

Zurich-based Swiss Re said it made a net loss of 381 million Swiss francs ($359.1 million), against an average forecast for a net profit of 139 million in a Reuters poll of 12 analysts.

But chief executive Stefan Lippe said the company was still confident of delivering on its targets.

"During the second quarter of 2009, our core business, despite the reported loss, continued to deliver strong underwriting results and solid earnings power," he said.

The world's second-biggest reinsurer said its excess capital at AA level had improved to 4.5 billion francs and its cost savings would be ahead of target in 2009.

The company's combined ratio in Property and Casualty was a healthy 89.4 percent, better than 91.0 percent a year earlier. A combined ratio below 100 percent shows insurance operations are profitable. - Reuters