The subprime mortgage meltdown in the US has claimed its first reinsurance victim, with Swiss Re announcing a startling CHF1.2 billion ($1.22 billion) write-down from exposure to credit default swaps.

Swiss Re released a statement on Monday saying the losses stemmed from two related credit default swaps written to protect a client against a fall in value of a collection of prime, midprime and subprime securities.

Credit default swaps are a form of insurance to protect a buyer against third party credit losses.

Swiss Re says the "unprecedented and severe" ratings downgrades by agencies in October and restrictions on the flow of credit led to a "significant and material reduction of the value of the underlying assets".

Swiss Re is confident its investment and trading portfolios are clear of further subprime exposure after an internal review.

Chief rival Munich Re says it has "nothing new to announce" on subprime exposure.

Swiss Re says the credit default swaps are still exposed to market fluctuations, but any further losses will be mitigated by the Group's conservative market value estimates for collateralised debt obligations in the portfolio.

Revelations of Swiss Re's losses comes two months after insurance industry luminary Maurice Greenburg predicted further pain for insurers stemming from subprime mortgage defaults.

Speaking at the International Union of Marine Insurance in Copenhagen, Denmark in September, Mr Greenburg said "many companies will suffer from the subprime debacle".

International broker Marsh has previously stated the contagion from sub-prime should be contained in insurance circles to a rise in liability claims - particularly in directors' and officers' and errors and omissions.