"The clearer separation between products and client markets will ensure underwriting quality standards, while significantly raising the focus on clients," the company said at the time.

That realignment will now have to be overseen by Jacques Aigrain, the former head of Client Markets, who takes over the CEO spot at the end of the year. He will succeed John Coomber, who has led Swiss Re for the past two years, helping lead the reinsurer back to profitability after two years of losses.

The management change announcement came when Swiss Re said net profits for the first half of the year fell 6 percent, which the company asserted was a testament to its new underwriting zeal. It termed the 8 percent decline in earned premiums a reflection of "the business group's pricing discipline in a softening market environment."

Reaction to the double announcement proved favorable when Deutsche Bank upgraded the stock to a "buy" saying "concerns surrounding Swiss Re's capital returns and pricing strategy have eased."

But for how long?

Andrew Murray, London-based Fitch Ratings director, reacted to the numbers, saying, "We believe the real test for cycle management will happen over the next couple of years as competition on pricing and terms and conditions potentially intensifies."

In this regard, he sees some favorable shifts in the wind. "There are signs from a number of players--Swiss Re included--that this time around there may be somewhat more discipline than in previous cycles," he said.

Mr. Murray said the company's numerous techniques for anticipating cycle trends put it in good stead with its peers in a very cyclical industry.

"They are trying to redeploy capital much more quickly in and out of business lines when they are strengthening and weakening," Mr. Murray said.

Ultimately, much smoother progressions and less volatility in earnings will result.

"If the market is much more attractive on the life side, then you will redeploy capital from the non-life side to the life side," he said.

Mr. Coomber may be looking back fondly on last April when the 2004 earnings presented a sunnier picture.

A 45 percent increase in net earnings and a 13.6 percent return-on-equity for 2004--after losses earlier in the decade--seemed to indicate that the cycle-management strategy was working. Commenting on 2004 results, the chairman said that during the hardening 2000-2003 cycle, premium growth jumped 80 percent, almost twice the growth rate in the global market. "In 2004, our policy was to sustain the quality of earnings on this higher premium base, and as a consequence, we experienced a small reduction in top-line revenues," he said. Earned premium for Swiss Re's property-casualty businesses fell 8 percent in 2004.

Managing the cycle also can mean managing relationships that are key in the sometimes clubby world of reinsurance.

"There is a competing dynamic here for chopping and changing lines of business to smooth out your earnings, relative to wanting to remain in the market and see it through the up-and-down side," Mr. Murray said. Swiss Re manages that competing dynamic, according to Mr. Murray, by dividing clients into "short-term opportunistic clients or long-term."

"If they are short-term, they won't accept anything other than a technical price. If they are longer-term, there may be a reason for accepting something below technical price," he said.

Swiss Re also has made a name for itself in the securitization of insurance risk.

"Just as the banking industry's business model was significantly changed in the mid-1990s with the development of asset-backed securities, the securitization of insurance risk is set to accelerate over the next ten years," said a company spokesperson.

Their ratings and global scale, as well as strong positions in both life and health and in property-casualty, give companies such as Swiss Re and Munich these kinds of options, Mr. Murray added.

That global diversity may prove key to surviving blips, such as the company's Bermudan life reinsurer competitors suffered because of higher than expected mortality losses in the second quarter.

Keefe Bruyette & Woods Analyst William Hawkins said that "Swiss Re may be able to demonstrate that its larger, more diversified portfolio makes it less vulnerable to this kind of concentration risk."

Swiss Re has a "double-A-plus" insurer financial strength rating from Fitch with a stable outlook.

Swiss Re CEO John Coomber (left) and Jacques Aigrain (right), have been two of the architects of changes for the reinsurer, but Mr. Aigrain will now lead the effort, replacing Mr. Coomber as CEO at year-end, the reinsurer announced.