Swiss Re cautious on US litigation, upbeat on renewables

Swiss Re isn’t buying into US-style litigation for Europe, but it’s all in on renewables, betting big on the growing opportunities of energy technology, a top executive has revealed.

Key points:
Caution on US-style litigation for Europe
Liability claims inflation and litigation pose challenges
Renewables and clean energy are growth priorities

“[There are] some American products that we import into Europe… this is not one that we want to import into Europe. This is something that we look at with very concerned reflections,” Gianfranco Lot, chief underwriting officer for P&C reinsurance at Swiss Re, said of the aggressive US litigation environment and associated liability claims during the company’s RVS media conference.

“As the reinsurers and insurers of liability classes, we look at this and we observe it with very great concern. There’s total litigation going on in the UK. In France, there’s mass tort litigations and there’s just liability claims inflation that goes up,” he emphasised.

Lot stressed that while US litigation has created systemic challenges for insurers, Europe is beginning to mirror some of these trends, prompting Swiss Re to tread carefully. The availability of liability limits has tightened and pricing pressures are rising, making certain liability products less attractive for European adoption, he admitted.

There’s a lot of technology that is coming into the vehicles, and that will transform the way we insure and the way we protect ourselves from incidents.

Meanwhile, the reinsurer is keen to respond to growing energy technologies in renewables. He highlighted specific sectors, noting investments in wind, solar, and nuclear: “We are very excited about sidebar comments on nuclear, which is an energy form that is also picking up quite rapidly. It is expected to triple by 2050. We are running the Swiss nuclear pool of Swiss Re and have quite a bit of experience with it.”

Lot also pointed to electric vehicles as a fast-growing area linked to the energy transition: “The take-up [of electric vehicles] is significant in China. They are leading the way. Electric vehicles, if anybody has driven one, you sit in a system where you have an iPad and you have an assistant driver [and] assisted driving modules that allow you to automatically brake, allow you to park, etc. There’s a lot of technology that is coming into the vehicles and that will transform the way we insure and protect ourselves from incidents.”

“A lot of investment goes into these renewable technologies… they are untested sometimes and they’re exposed to all sorts of perils, including natural catastrophes. But as we gain more and more experience, we see this as an exciting growth space.”

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