Business activities

Reinsurance business

Strategy and priorities

SRCS conducts the commercial insurance business of the Swiss Re Group and is committed to deliver long-term profitability and economic growth. Through our network of subsidiaries, future growth aspirations are focused on selected areas, with dedicated strategic initiatives in Primary Lead and further broadening of the footprint. Corporate Solutions offers customised, innovative and multi-line, multi-year risk transfer solutions, taking into account the unique needs of local markets and specialty industries.

Outlook

In 2018, the commercial insurance market was impacted by large natural-catastrophe events and a high severity and frequency of large man-made losses in industrial business lines across all geographies. While rates and terms and conditions have improved, commercial risks, particularly in the large corporate segment remain inadequately priced and the industry continues to be unprofitable overall. Corporate Solutions expects an accelerated market hardening and a reinforced focus on terms and conditions over the next 12 to 18 months.

Investments

Strategy and priorities

Financial investments are managed in accordance with Swiss Re’s Targeted Standard on Asset Management and SRCS’s investment guidelines, which are intended to ensure compliance with regulatory requirements. The general principle governing investment management in SRCS is the creation of economic value on the basis of returns relative to the liability benchmark, while adhering to the investment guidelines and the general prudence principle. The liability benchmark is determined by approximating an investable benchmark from projected liability cash flows. A cash benchmark is used for the economic surplus.

Outlook

Global economic growth has peaked and is expected to slow in 2019, particularly in advanced markets. In the US and EU, tighter financial conditions, the waning US fiscal stimulus and lingering political concerns are likely to weigh on growth. Economic growth in emerging Asia is expected to slow moderately, but remains the strongest region globally, while Latin America will see a modest growth recovery, albeit from a low base. In contrast to last year’s outlook, the balance of risks is seen as skewed to the downside, amid increasing protectionism (eg US-China trade conflict), ongoing monetary-policy tightening, late-cycle concerns (especially in the US) and uncertain (geo)politics (eg Brexit, European Parliament elections and elections in India, South Africa and Argentina).

Reinsurance and sub-holding company

SRCS, domiciled in Zurich, Switzerland, performs a dual role within the Swiss Re Group as both a reinsurance company and a sub-holding company for the Corporate Solutions Business Unit. SRCS is a wholly-owned subsidiary of Swiss Re Ltd, the ultimate parent company domiciled in Zurich, Switzerland.

Claims on and obligations towards affiliated companies

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CHF millions

2017

2018

1

The subordinated liabilities were against the parent company Swiss Re Ltd.

 

There were no other outstanding claims on and obligations towards the parent company Swiss Re Ltd at the end of the periods 2018 and 2017.

Loans

945

1 181

Funds held by ceding companies

1 566

486

Premiums and other receivables from reinsurance

1 300

1 069

Other receivables

90

293

Reinsurance balances payable

470

342

Other liabilities

54

24

Subordinated liabilities

 

2961

Share capital and major shareholder

The nominal share capital of SRCS amounted to CHF 100 million. It is divided into 100 000 shares, each with a nominal value of CHF 1 000. The shares were fully paid-in and held directly by Swiss Re Ltd. As of 31 December 2018 and 2017, SRCS was a wholly-owned subsidiary of Swiss Re Ltd.

List of branch offices

  • Swiss Re Corporate Solutions Ltd, Dubai Branch
  • Swiss Re Corporate Solutions Ltd, Labuan Branch

Change in subsidiaries

SRCS contributed in kind its shareholding in the service companies in Slovakia, Mexico, Brazil and the United Kingdom to its subsidiary Swiss Re Corporate Solutions Investment Holding Company Ltd.

Variable interest entities

SRCS and its subsidiaries enter into arrangements with variable interest entities (VIEs). For more information, please see (PDF:) Note 14 of SRCS’s consolidated 2018 Annual Report (available on www.swissre.com).

Report of the statutory auditors

PricewaterhouseCoopers Ltd is the auditor of SRCS. For more information, please see the (PDF:) Report of the statutory auditor in SRCS’s 2018 Annual Report (available on www.swissre.com).