Supporting financial resilience

Re/insurance supports financial resilience by acting as a shock absorber and promoting growth through its core businesses. This is particularly important in a challenging and volatile macroeconomic environment.

However, unconventional monetary policies implemented by central banks following the financial crisis of 2008 – 2009 present a challenge for our industry and have contributed to an environment that is not conducive to sustainable economic growth.

As long-term investors, re/insurers could play a pivotal role in bridging the emerging infrastructure financing gap, which, in turn, would contribute to a healthier economic environment. But for that to happen, the right framework needs to be put in place. Standardisation of infrastructure investments would be an important step forward, while infrastructure debt as a tradable asset class would certainly make infrastructure more attractive for long-term investors.

At Swiss Re, we are striving to influence these developments by actively participating in and contributing to the global and local financial reform dialogue. Ultimately, we want to ensure long-term investors can act – not only think – on a long-term horizon to achieve greater financial resilience.

Our notable achievements in 2016:

• We continued to take an active role in the debate on the consequences of financial repression for savers and long-term investors as well as the broader implications for financial resilience, eg through a fact sheet, a by-liner in the IMCA quarterly report no. 41 (www.imcagroup.org) and by sharing our views with key public and private sector stakeholders;
• We remained at the forefront of the policy call to make infrastructure debt a tradable asset class as we believe that bridging the large infrastructure financing gap is key to sustainable economic growth;
• We launched a joint research project with the London School of Economics and Political Science (www.lse.ac.uk) on long-term investing and monetary policy. Its key objectives are to analyse the effect of low interest rates on structural reforms, investigate the effect of monetary policy on capital markets and consider alternative monetary policy tools.