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- Beyond ”insurance for insurers”
Beyond ”insurance for insurers”
Reinsurance’s core function is to act as an ”insurer for insurers”. However, this is only part of the value for clients. Swiss Re’s Reinsurance Business Unit has two further strategic pillars that complement the traditional risk transfer business.
The first pillar, ”Transactions”, provides tailored reinsurance transactions to solve a client’s specific strategic need. The ”Solutions” pillar provides clients with access to new technologies, products and ideas to grow their business or improve profitability. Together, these two additional pillars open up important new business opportunities for Swiss Re.
Tailored transactions
Tailored reinsurance covers are designed to transfer risk in a way that helps a client realise a specific strategic goal. Although tailored reinsurance covers can be complex, they can make all the difference for the underlying financial goals of the client.
Firstly, a client may have a very specialised type of business that requires equally specialised protection. For example, in 2021, Swiss Re structured a longevity deal for an insurer covering the annual pension payments for a large UK manufacturer. This specialised reinsurance agreement covers the insurer against the risk that people invested in the pension fund live longer than what is budgeted for.
Another reason to use a tailored risk transfer arrangement is to unlock statutory capital. In 2021, Swiss Re worked with a US life insurer to develop a strategic, tailored reinsurance agreement covering term life insurance policies issued over the past 12 years. This reserve transaction unlocked USD 1 billion of statutory capital for the client.
Tailored reinsurance covers helped several clients in 2021 in the wake of man-made disasters and natural catastrophes, where Swiss Re’s expertise can ensure the long-term stability of the client’s capital adequacy following large payouts.
Swiss Re also helps clients with so-called “long-tail business”, for example, where a casualty insurer has built up a portfolio covering claims decades into the past. This type of insurance business can be capital intensive to maintain and requires significant operational resources. Swiss Re’s tailored reinsurance helps clients to better structure their legacy portfolios and make the best possible use of their capital and operations.
Swiss Re’s Reinsurance Business Unit completed a record number of tailored reinsurance covers in 2021. By providing this highly specialised expertise, and sharing in the risk, tailored transactions give Swiss Re a significant market advantage.
“Solutions”: Technology and expertise
Reinsurance is a great source of technological know-how for insurers. For example, Swiss Re is transforming the life insurance business through its automated underwriting solutions. Its suite of automated underwriting tools creates a much more streamlined onboarding process for life insurance customers. This can cut costs for insurers by reducing their workload. It can also grow their business by making life insurance more accessible for new customers.
L&H Re underwriting solutions
Swiss Re’s clients can benefit from access to the leading underwriting tools in the business. These tools help insurers more accurately understand risks and improve the onboarding process for customers.
Life Guide
Life Guide is Swiss Re’s own life and health underwriting guide, which is deployed by over 800 companies in more than 100 countries across the globe. Consistently ranked as the top underwriting manual for life insurance in the prestigious annual NMG survey of the insurance industry, Life Guide combines medical and underwriting expertise with the analytics needed to assess life insurance applications.
Life Guide is developed and maintained by Swiss Re’s underwriters, doctors and actuaries, who monitor the latest medical, regulatory and technological developments. The guide was further enhanced in 2021. One important new feature is the “cardiometabolic calculator”, which helps underwriters understand risks that have complex health interactions, such as diabetes and smoking. Significant lessons learned for underwriters from the COVID-19 pandemic were also recently added to Life Guide.
800
Insurance companies using Life Guide
Magnum
Traditionally, underwriting life insurance was a lengthy process involving medical tests and lengthy questionnaires. Swiss Re’s Magnum shortens this process via an automated underwriting platform. This enables insurers to provide their customers with an efficient, simplified application process for life insurance.
Magnum is used by more than 60 insurers in 26 countries. In China alone, it is used on 1.3 million devices. Because it is powered by Life Guide, clients are secure in the knowledge that there is no trade-off between efficient applications and quality underwriting.
1.3million
devices equipped with Magnum in China
Smart Access
Simplified underwriting is instrumental in making insurance more accessible. However, there are applicants who will not be accepted through this simplified process because they have certain medical conditions.
Smart Access is a solution that evaluates these more complex cases in a cost-effective manner. The application builds on Magnum to further assess an application at the point of sale. Smart Access can assess any insurance request by asking the customer basic questions about their condition.
90–95%
Acceptance rate for life insurance applications with Smart Access
Learn more about our risk transfer business
