Zurich  - Swiss Re announced Thursday net losses in 2008 of 864 million francs, mostly on investments, as the insurance giant's credit rating was downgraded, increasing its funding requirements.

In 2007 Swiss Re had turned a 4.2 billion francs net profit.

Stefan Lippe, who was appointed CEO earlier this month, said in a statement that the result was "clearly disappointing," but that January had proved to be a better month for the company.

He said the core insurance business was solid and that Swiss Re was working "to de-risk the investment portfolio." The group was also cutting costs.

The company posted a fourth quarter loss of 1.75 billion francs.

Earlier this month, the re-insurer said it had managed to raise capital, including a 3 billion-Swiss-franc (2.58 billion dollars)- investment from US financier Warren Buffet through Berkshire Hathaway.

Swiss Re was waiting for shareholder approval to issue the convertible bond, which would give Buffet a 20 per cent stake in the company.

The group was also considering taking another 2 billion from other investors.

Standard and Poor's has downgraded the company's credit rating from an AA- to A+ citing capital depletion. Swiss Re said this would lead to additional funding requirements of 1.5 billion dollars.

Swiss Re has been hit hard by its exposure to credit default swaps and has seen its stock plunge over 60 per cent in the past year. (dpa)