Swiss Re has seen premium rates pick up -paper

ZURICH Nov 29 (Reuters) - Swiss Re RUKN.VX, the world's second-biggest reinsurer, has seen premium rates in the reinsurance market pick up, the group's head was quoted as saying in an interview on Saturday.

"What is positive for us is that the premium rates in the reinsurance market are picking up again. We are seeing that the conditions and margins in the actual reinsurance business are improving," Chief Executive Jacques Aigrain told Switzerland's daily newspaper NZZ.

"Conversely, lower returns on investment should be expected," Aigrain said in the interview.

Earlier this month, Swiss Re posted a surprise third-quarter loss as it wrote down 572 million Swiss francs ($477.5 million) on investments for the quarter and reported a 289-million-franc unrealised mark-to-market loss on credit default swaps (CDS).

The group has been hurt more than its competitors by the financial crisis, writing down around 3 billion francs on its investments so far in its financial services unit, which creates products to transfer risk to capital markets.

Aigrain said portfolio CDS, the reinsurance of financial guarantees and some trading positions, which had earlier been used for diversification, were not being continued.

Aigrain also said Swiss Re was well capitalised and did not need any external capital. (Reporting by Katie Reid, editing by Anthony Barker)