Risk management

Risk management is integrated into the Group’s key business decisions and promotes a forward-looking awareness of our risk profile.

Embedded throughout the business, our Group Risk Management function ensures an integrated approach to managing current and emerging threats. Risk Management plays an integral role in business strategy and planning discussions, where our risk appetite framework facilitates risk-return discussions and sets boundaries to Group-wide risk-taking.

At Swiss Re, all risk-taking activities are subject to our Group Risk Policy. The policy describes Swiss Re’s risk mandate, including our Group risk appetite framework, and articulates the Group’s four fundamental risk management principles. We strive to apply these four principles consistently across all risk categories at Group, Business Unit and legal entity level:

  • Controlled risk-taking: financial strength and sustainable value creation are central to Swiss Re’s value proposition. We thus operate within a clearly defined risk policy and risk control framework.
  • Clear accountability: our operations are based on the principle of delegated and clearly defined authority. Individuals are accountable for the risks they take on, and their incentives are aligned with Swiss Re’s overall business objectives.
  • Independent risk controlling: dedicated specialised units within Risk Management monitor all risk-taking activities. They are supported by independent Compliance and Group Internal Audit functions.
  • Open risk culture: risk transparency, knowledge sharing and responsiveness to change are integral to our risk control process.

Controlled risk-taking

The Swiss Re Group operates within a clearly defined risk policy and risk control framework, which comprises a body of standards that establishes an internal control system for managing risk. It defines key tasks, which represent the five core components of Swiss Re’s risk management cycle:

  • Risk oversight of planning — ensures that the risk implications of plans are understood and determines whether the business and investment plans at Group and Business Unit level adhere to Swiss Re’s risk tolerance.
  • Risk identification — ensures that all risks to which Swiss Re is exposed are transparent in order to make them controllable and manageable.
  • Risk measurement — enables the Group to understand the magnitude of its risks and to set quantitative controls that limit its risk-taking.
  • Risk exposure control — allows Swiss Re to control its risk-taking decisions and total risk accumulations, including the passive risk we are exposed to through our operations.
  • Risk reporting — creates internal risk transparency and enables Swiss Re to meet external disclosure requirements.

The Risk Management function facilitates risk awareness by promoting a forward-looking assessment of the Group’s risk profile. The function is integrated into the Group’s key business decisions, seeking to be a trusted partner within Swiss Re as well as for our external stakeholders.

The Group’s risk-taking is steered by our risk appetite and risk tolerance (see Swiss Re’s risk appetite framework).

While the risk appetite guides what types of risk the Group aims to write, risk tolerance is an expression of the extent to which the Group Board of Directors has authorised the Group Executive Committee (Group EC) and Business Unit management teams to assume risk. Risk tolerance criteria are specified for the Group and Business Units, as well as for Swiss Re’s major legal entities. Furthermore, Swiss Re uses a limit framework to limit its risk exposure accumulations at different levels.