Reinsurance

“We’re focused on portfolio steering, transactions and underwriting discipline.”

Christian Mumenthaler

CEO, Reinsurance

Strategy and priorities

Our Reinsurance Business Unit strategy focuses on differentiation and profitable growth through a dedicated emphasis on profitable risk pools, enabled by a strong operating platform and talent base.

Systematically allocate capital to risk pools/revenue streams

By applying metrics based on cash flow, US GAAP and our integrated Economic Value Management (EVM) framework we seek to steer both Property & Casualty (P&C) and Life & Health (L&H) Reinsurance businesses to the most profitable risk pools. As a result we’ve been shifting the weighting of our lines of business in line with our underwriting framework and growth strategy. In P&C, we prioritised high growth markets and have been reducing property business since 2013 where prices have become increasingly challenging. In L&H we continued to grow the contribution from high growth markets and from health, in particular.

We allocate capital to the most attractive lines of business and steer it toward the business that is most relevant for our clients. We have been emphasising transactions, which are tailored, complex solution structures that efficiently fit client needs and bring unique added value. Demand for such structures is being driven especially by more stringent solvency and capital standards, often in L&H.

Broadening and diversifying our client base to increase access to risk

We have continued to work on expanding our client base through a dedicated focus on specific client segments (such as regionals and nationals, or R&N), lines of business (such as casualty and health) and geography (especially high growth markets).

In the R&N segment, we have been investing significant effort to understand the needs of our clients and tailoring our offerings accordingly since 2011. As a result, we have won an average of more than one hundred new P&C clients per year and improved the retention of existing ones.

In casualty, we proactively manage our business according to the cycle, aiming for a disciplined expansion. Growth has been significant since 2011, particularly in the US. At the same time we make significant investments to understand the impact of new risks in the casualty book, such as cyber risks or driverless cars; furthermore, our Liability Risk Driver (LRD) model gives us a new way to systematically, objectively, and transparently assess liability risks.

In health, we address the needs of ageing populations and are capitalising on the opportunities from increasing demand for primary health products, particularly in Asia and the US. We expect cessions to the reinsurance market to grow along with demand in the primary market.

Finally, we continue to expand geographically. High growth markets now account for about 20% of our premiums. Our focus in high growth markets is to establish high-performing local teams, further enhance client loyalty and support efforts to increase overall market penetration.

Optimising resources and platforms

The Reinsurance Business Unit is continuously improving its operations and processes. We have systematically relocated client-facing functions to high growth markets, particularly Asia. By combining client management and underwriting responsibility, we have become more effective for our R&N clients. We have also continued to invest in IT platform optimisation in both P&C and L&H.

Emphasising differentiation

Differentiation in Reinsurance is based on financial strength, strong client relationships and our knowledge company approach. Our financial strength is reflected by the ratings in Capital management. Our close relationships allow us to better understand clients’ needs through regular exchange with key decision makers and tailor solutions specifically for them. As a result we achieve remarkable client retention and premium growth. Today clients rank Swiss Re first or second in all markets except in Latin America, where we rank third, according to Flaspöhler ratings.

Such relationships are supported by our knowledge company approach, which allows us to deliver a wide spectrum of products and services. We help our clients grow through, for example, new or co-product development, portfolio/risk analysis, catastrophe modelling advisory, Solvency II consulting and rating exposure support. We also share knowledge with our clients through client workshops and training — in 2015 we delivered on-site client training for more than 600 participants from over 40 countries and for more than 800 others through eLearning. We also provide unique systems and simulation tools to clients, such as CatNet, a natural hazard information and mapping system; SwiftRe, our online self-service facultative reinsurance platform; and Magnum, our automated underwriting system for L&H.