Michel M. Liès: Life is Risk

Michel M. Liès' career at Swiss Re spanned 35 years and two continents. A trained mathematician born in Luxembourg, Mr. Liès held various roles at the company before taking the reins as CEO in 2012. On the eve of his retirement, Mr. Liès recalls how he'd never considered becoming a reinsurer and how a job he started by chance ended up shaping his entire working life and his vision of the world.


Q: Do you recall a defining moment in your long career at Swiss Re?

Michel M. Liès: I recall many, and they are mostly happy memories. First of all my initial recruitment at Swiss Re was a pivotal moment because I learnt what reinsurance really was. Another major step was when I moved from Latin America to Europe, and before that, when I moved from the Life to the Non-Life unit. My first visit to a client is a special memory as I realised that the essence of the job was to continuously learn and share your knowledge to help people. And finally, the creation of Global Partnerships was very exciting, and with it the challenge to explain what insurance can mean for people who have a limited view of risk management and focus more on post-catastrophe reaction than pre-catastrophe prevention.

Q: Indeed, one of your main responsibilities has been to lead Swiss Re's expansion into high growth markets and contribute to taking insurance where it's never been before. How do you judge the progress Swiss Re has made so far?

Liès: I think we are in a very good position. We have a long-term strategy in emerging markets. Despite some hiccups in a few of them, we believe they will continue to play an important role for us and the rest of the industry. Expansion in such markets is also an opportunity to address people who are less used to the classical model of insurance. Especially in terms of innovation, these territories can also serve as a test area for new business models and products. In most mature countries, even people in the street have an idea on what insurance is, but in emerging markets, that is not always the case. Maybe it will be easier to reach these people and help them develop an interest in insurance through social media for example, which is increasingly popular and extremely important for us. In many of these emerging countries, insurance penetration is still not where it should be, meaning that there's still a lot to do to make people understand what we can bring to them.

Q: How has Swiss Re changed through the years?

Liès: The company underwent an evolution, going from being a knowledge company --which Swiss Re has always been -- to a knowledge company with a strong commercial standing. I feel this evolution has recently accelerated. We also improved in matters of transparency, creating a company structure that allows observers to benchmark our activities.

Q: What are the key elements for Swiss Re's success?

Liès: Knowledge remains a key differentiator for us. However, another advantage we have is to be a B2B company, meaning that we are a product developer, rather than a retail distributor. Many of the changes that are bound to impact the insurance industry will affect the distribution channels, especially the retail distribution channels. The agents and other intermediaries won't disappear, but there will be a reduction to those with real added value to propose. On the other end, new technologies may help primary insurers and their intermediaries as they support their clients in the search for the insurance solutions that best fits their needs. Also on the underwriting front, new technologies will contribute to better capture the needs and price them. Last but not least, innovations like autonomous cars may bring motor insurance away from the drivers themselves towards the producers of the software that is "driving" the cars. A lot of challenges but, all in all, an excellent opportunity for everybody to win the battle of relevance of the industry in this new promising environment. For us as Swiss Re the main challenge is to concentrate on product development and make it more understandable for the potential buyer. However, I am optimistic - in our 150 years of history, we had good and bad experiences from which we can learn as we prepare for the future.

Q: Why is our updated strategic framework the right path forward?

Liès: Because it has not been invented from scratch and it draws from the experiences we had in the last five years. It captures a strategy that we had already in place and this is reinforced. We took a look at the good experiences that the business units had, that the Group had, and integrated them with what needed to be improved, bringing it all together under the new strategic framework. It wasn't so much about becoming something different, but rather giving ourselves a strong direction based on what we have achieved, what we need to recalibrate and where we want to be in the future.

Q: What are Swiss Re's strengths and weaknesses?

Liès: Swiss Re is a company that clients can trust. There is a certain level of humility, we do not pretend we know everything but we are quite responsive to what we observe. We like to discuss with our clients, but we don't solve problems that they don't have. I believe we act as a "consultant with skin in the game" and we are convinced we have what it takes to help our clients achieve their goals. As for weaknesses, I would mention a certain inclination to complexity, which can be positive when we are set to solve a problem but can slow things down internally.

Q: What is our next challenge? And for the rest of the industry?

Liès: Being relevant. We know perfectly well that the industry is not relevant enough but we also know that the raw material we work with – risk -- is growing. We don't believe that every risk can be covered, but we definitely need to elaborate as much response as possible to risk happening on this planet. Relevance is not only a question of size, it's the ability to help your clients achieve what they want to achieve.

Q: What is risk to you?

Liès: It's life. Life is risk. And as I'm very positive about life, I'm very positive about risk. I think risks are unavoidable, but a life without risk is not really a life.

Q: Is this vision of risk that brought you to insurance? Or what else?

Liès: Pure chance. I don't think that becoming an insurer is the dream of many 10-year-olds. You may dream of becoming a fireman, a Formula 1 driver, a footballer, but rarely an insurer and even less an actuary! For me, it was love at first sight. Being a mathematician, I have a certain inclination to abstraction and this is a business built on that. Swiss Re has never produced a single nail, but it became a very large and successful company because we knew how to share our knowledge and we knew how to inspire trust in the long term.

Q: So what made you stay?

Liès: There was no morning in my life that I was unhappy to work for this company, and many mornings when I was actually proud of it – that is what makes you stay.

Q: Do you have any advice for someone who would like to start a career in the reinsurance industry?

Liès: To forget the word "insurance," and the concept of insurance that you have been familiar with for all of your life. If you're interested in what surrounds you, in the challenges that our planet is facing, in sustainability and in finding solutions instead of only complaining about what is not working, this is the place to be. If you like risk, and even better, to "manage" risk, you'll be happy in this industry.

Q: What kind of plans do you have now?

Liès: I'd like to take about six months off and spend them between France, Switzerland and somewhere else. I will take time to evaluate any professional, non-operating offers, and in the meantime, I plan to take up piano playing again, which I used to do when I was younger, spice up my cooking skills and go to the cinema more often, something I was passionate about but haven't done in years. I do not exclude to try something that I've never done very intensively before, such as sports. I may also try and understand a bit better what social media can bring to my life. I'll never become a total freak on that but it's today's life. Spending more time with my family is also a clear priority. Honestly, right now I don't quite know what to expect. I guess the biggest challenge I have will be to organize my life, which so far has been for a large part defined by work. Mastering an agenda which starts off empty will be a nice experience but not as easy as it may appear.

Q: What kind of sports are you interested in?

Liès: I have a "passive" passion for football, I like to watch it, but when it comes to practising I'm attracted to sports that allow me to enjoy the landscape… so, walking, running, swimming in rivers and lakes. At my age, I'm no longer interested in the competitive aspect!

Q: What is it about Swiss Re that you'll miss the most?

Liès: There is a kind of global energy in this company. Each person is proud to do what they are doing. I cannot tell you what I told you about this company without pretending that I won't miss it, but at the same time I am looking forward to this new chapter of my life.