Liquidity management

The active management of liquidity risks ensures the Group’s ability to satisfy its financial obligations.

As a re/insurance group, Swiss Re’s core business generates liquidity primarily through premium income. The Group’s exposure to liquidity risk stems mainly from two sources: the need to cover potential extreme loss events and regulatory constraints that limit the flow of funds within the organisation.

A range of liquidity policies and measures are in place to manage these risks, in particular to ensure that

  • sufficient liquidity is held to meet funding requirements under current conditions as well as adverse circumstances;
  • funding is charged and credited at an appropriate market rate through Swiss Re’s internal transfer pricing;
  • diversified sources are used to meet the Group’s residual funding needs; and
  • long-term liquidity needs are taken into account in the Group’s planning process and in the management of financial market risk.