Swiss Re outlines plans for further growth in reinsurance
Reinsurer Swiss Re has outlined its growth strategy and targets, saying the Reinsurance Business Unit is the foundation of the Group’s strength, with increasing earnings power. Corporate Solutions is focused on returning to profitability and leveraging its competitive advantages. Life Capital is creating economic value for the group by expanding its open book business.
Swiss Re’s group chief executive officer Christian Mumenthaler said: “Swiss Re’s strategy is centred around diversifying our access to risk pools by leveraging our risk knowledge, unique client access and capital strength. We are winning an increasing proportion of reinsurance business through our capabilities in underwriting large transactions and providing innovative solutions. We are investing in research and technology to give us an edge in accessing growing risk pools, such as natural catastrophe, and drive forward our Corporate Solutions and Life Capital businesses. The group’s superior capital strength allows us to capture such opportunities and maintain attractive shareholder returns.”
An integral part of the group strategy relies on monetising its research and development (R&D) capabilities. The group is running 80 R&D programs with 450 dedicated FTEs and investing about USD 300 million a year in key technology projects.
Swiss Re’s growth strategy in natural catastrophe business supported by the establishment of Alternative Capital Partners.
Established in September 2019 in Group Finance by combining its ILS, Retro and Syndication teams, the Alternative Capital Partners unit makes use of a broad range of third-party capital vehicles. Swiss Re said the unit will enable Reinsurance to grow its natural catastrophe book, while proactively keeping group peak exposures within risk limits. Alternative Capital Partners follows a differentiated partnership approach and offers third-party investors an opportunity to benefit from alignment with Swiss Re’s underwriting views.
Swiss Re’s group chief financial officer John Dacey said: “The establishment of Alternative Capital Partners enhances our already flexible capital structure. It allows us to consider all sources of capital holistically.”
Swiss Re said its casualty reinsurance portfolio is well diversified and prudently reserved, giving the group scope to absorb volatility, while Asset Management is consistently generating attractive returns. Transactions and Solutions are becoming ever more important to Swiss Re’s offering and demonstrate significant further growth potential, said Swiss re.
Reinsurance is pursuing a targeted growth strategy supported by portfolio steering. Based on expected loss trends, pricing outlook and risk management, the Business Unit is expanding its natural catastrophe franchise, while managing exposure in casualty reinsurance.
Swiss Re intends to further grow and diversify its natural catastrophe portfolio, with a positive effect on earnings.
Life Capital continues its transition from a closed book consolidator to a growing primary B2B2C business that leverages technology and data.
In the closed book business, Swiss Re’s mid-term goal to reduce its ownership and deconsolidate ReAssure remains unchanged.
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