Admin Re® stands at the busy crossroads of regulatory and market changes in the life insurance business.
Admin Re® acquires and administers books of life insurance that are closed to new business. The business is centred on acquiring blocks of life insurance at a discount, running them off and thereby freeing up the capital invested and generating cash for the Swiss Re Group.
There are several reasons why closed life books come to the market. Regulatory changes may prompt insurance companies to rethink their capital allocation, leading some to sell parts of their closed, in-force businesses. Under Basel III regulations the insurance business may be less attractive to banks. Volatile financial markets are also forcing some companies to concentrate on their core business.
Another market driver is potential growth in emerging markets. Many European insurers would like to redeploy capital by selling a closed book in, for example, the UK, to reinvest the money into building up a market presence in, say, India.
Admin Re® can help insurers adjust to such changing conditions by acquiring their closed or non-core in-force life insurance portfolios, allowing them to be more flexible in pursuing their strategic objectives.
The Business Unit is continuing to focus on selective acquisitions in the UK. Opportunities continue to arise, though the long-term nature of the business means that management must scrutinise all possible deals very closely. And while the aim is to operate an efficient platform, Admin Re® recognises the critical importance of meeting obligations to the policyholders underlying such transactions.
Over the last year, Admin Re® has upgraded core actuarial, finance and IT capabilities and systems across its operating platform. These initiatives have made it more efficient and more effective in managing the risks of the underlying portfolios.
Admin Re® has created a dedicated UK-based service company to improve customer service, operational stability, regulatory compliance and cost efficiency. Leveraging this streamlined and scalable platform, as well as its strong market presence in the UK, management remains focused on generating cash for reinvestment and paying dividends to the Group.