Governance and risk management

Board of Directors and Executive Management

For information on the composition of the Board of Directors and Executive Management of Swiss Re Ltd, see sections relating to the Board of Directors and Executive Management in the 2017 Financial Report on pages 104–129.

Governance and risk management

Information on Swiss Re’s risk management and risk governance is publicly disclosed in the 2017 Financial Report on pages 66–91.

Swiss Re’s Risk Management function is embedded throughout the Group and is an integral part of its business model. Risk Management is mandated to ensure that the Group and its legal entities have the necessary expertise, frameworks and infrastructure to support good risk-taking. In addition, Risk Management monitors and ensures adherence to applicable frameworks.

All risk-related activities, regardless of the legal entities in which they are undertaken, are subject to Swiss Re’s risk management framework, which comprises the following major elements:

  • A risk policy and risk governance documentation. The Group risk governance documents are organised hierarchically, across five levels, which are mirrored by equivalent documents at legal entity level. See page 76 of the 2017 Financial Report.
  • Four key risk management principles, which apply consistently across all risk categories at Group and legal entity level. See page 76 of the 2017 Financial Report.
  • Three fundamental roles for delegated risk-taking, including the three lines of control. See page 76 of the 2017 Financial Report.
  • A description of Swiss Re’s risk culture that promotes risk awareness, rigour and discipline across all risk management activities. See page 77 of the 2017 Financial Report.
  • The organisation of risk management, including responsibilities at Board and executive level. See page 78 of the 2017 Financial Report.
  • Swiss Re’s risk control framework, which comprises a body of standards that establish an internal control system for taking and managing risk. See page 79 of the 2017 Financial Report, as well as further information in the interactive online report.
  • The Group’s risk appetite framework, including its overall risk appetite statement, risk tolerance and capacity limits. The risk appetite framework establishes the overall approach through which Swiss Re practices controlled risk-taking throughout the Group. See the Risk appetite framework section in the 2017 Financial Report on page 80.

Swiss Re’s internal risk model provides a meaningful assessment of the risks to which the Group is exposed and is an important tool for managing the business. It determines the capital requirements for internal purposes and forms the basis for regulatory reporting under the SST and under Solvency II for Swiss Re´s subsidiaries in Continental Europe. For more information, see the Risk assessment section in the 2017 Financial Report on page 81, as well as further information in the interactive online report.

Swiss Re regularly assesses its risk exposure across all risk categories. The Group identifies and evaluates emerging threats and opportunities through a systematic framework that includes the assessment of potential surprise factors that could affect known loss potentials:

  • Swiss Re is exposed to a broad risk landscape, see page 81 of the 2017 Financial Report.
  • Insurance risks are all risks that Swiss Re takes through its underwriting activities, including related risks such as inflation or uncertainty in pricing and reserving. For details on insurance risk management for property and casualty risks as well as life and health risks, see the Insurance risks section in the 2017 Financial Report on pages 84 and 85.
  • With respect to financial risks, Swiss Re distinguishes between financial market risk and credit risk. Financial market risk is the risk that assets or liabilities may be impacted by movements in financial market prices or rates − such as equity prices, interest rates, credit spreads, foreign exchange rates or real estate prices. Credit risk is the risk of incurring a financial loss due to diminished creditworthiness or default of Swiss Re’s counterparties or third parties (credit spread risk falls under financial market risk). For more information, see the Financial risk section in the 2017 Financial Report on pages 86 and 87.

Swiss Re also assesses other risks such as operational, liquidity, model, valuation, regulatory, political, strategic and sustainability risks. These risks are not explicitly part of the Group’s economic capital requirement, but are actively monitored and controlled due to their significance for Swiss Re. For more information, please refer to the Risk profile section.

In September 2017, the Group Board of Directors approved new SST capitalisation targets for the Group and the legal entities Swiss Reinsurance Company Ltd and Swiss Re Corporate Solutions Ltd, which act as holding companies for Swiss Re’s Reinsurance and Corporate Solutions Business Units. The targets are set at a similar level to the 2017 respectability limits and represent capitalisation objectives for executive management in normal operating circumstances; they also serve to caution management against holding excess capital. These changes took effect in 2018.