Swiss Life, Switzerland's biggest life insurer, has discovered another accounting error that means first-half losses are much wider than originally reported, it admitted yesterday.

The company said that it lost SFr578m (£257m) in the period after tax, compared with the SFr386m after-tax loss it reported last month.

It said auditors at Price Waterhouse Coopers had discovered that a computer error had incorrectly valued some maturing bonds.

Last month, Swiss Life restated last year's results, saying that it had mistakenly booked an unrealised investment gain during the first half of 2001.

The company said the latest error would not affect its plans to raise SFr900m to SFr1.2 billion in a rights issue to shore up its ravaged balance sheet. However, analysts were not convinced.

"What Swiss Life is doing here doesn't help build trust," said Urs von Arx, a fund manager at Pictet & Co. The new management has to prove itself before I would consider buying any new shares."

Chairman Andres Leuenberger said that the new discovery was a "programming error".

Mr Leuenberger added that Swiss Life's internal controls are being strengthened to make sure that the problem does not happen again.

Chief executive Roland Chlapowski said: "This new reporting error is very regrettable.

"It reveals weaknesses in the project management in implementing the new securities administration system."

Chlapowski added: "We will follow up accordingly and qualitatively and quantatively strengthen the accounting team, under the management of Bruno Pfister, our new chief financial officer since the middle of August."

Swiss Life shares fell another 8.5pc to SFr155. They have fallen by more than 80pc over the past year, making the company the worst-performing insurance stock in Europe.

Last month, the group scrapped a plan to expand in European banking and announced 700 job losses, on top of the 800 cuts it made in April.

The company, which has spent about £2 billion on takeovers since 1996, plans to focus on life insurance and scale back its business in Britain, Italy, Spain, France and Belgium.

money.telegraph

-- Anonymous, October 22, 2002