Swiss Solvency Test (SST)
Swiss Re is supervised by FINMA at the Group level as well as for its regulated legal entities domiciled in Switzerland. FINMA supervision comprises minimum solvency requirements, along with a wide range of qualitative assessments and governance standards.
Based on current SST rules introduced in 2017, the ratio is calculated as SST risk-bearing capital (SST RBC) minus market value margin (MVM), divided by SST target capital (SST TC) minus MVM.
The Group SST 2020 report will be filed with FINMA in April 2020. Accordingly, the information presented below is based on currently available information and may differ from the final Group SST 2020 figures.
In SST 2020, the solvency of Swiss Re Group remains at a very strong level of 232% as of 1 January 2020, well above the target of 220%. SST risk-bearing capital increases driven by strong investment contribution and higher supplementary capital, partially offset by capital distribution to shareholders. Underwriting contribution remained positive despite large losses from natural catastrophes, man-made events and increased claims in US casualty business. Strong growth in insurance risk as well as lower interest rates increase SST target capital and SST run-off capital costs (MVM) leading to the observed decrease in the ratio.
Swiss Re’s Group SST 2020 ratio does not reflect the agreed sale of ReAssure Group plc to Phoenix Group Holdings plc expected to close in mid-2020. The transaction is estimated to increase the SST ratio by 12 percentage points.