Admin Re® strategy - an interview with Bob Ratcliffe, CEO
How does Admin Re® create value?
We buy blocks of business that others want to divest – to release capital or to shed administrative responsibilities. This typically means we acquire closed life books at a discount which deliver a very stable cash flow and generally have low correlation with Swiss Re’s other businesses.
Is it a selective business?
We are very selective about the business we pursue. These transactions are very long-term in nature and it is critical that we understand all the component aspects.
Although the business model itself is quite straightforward, the underlying activities can be very detailed and need deep understanding and evaluation that extends to financial and actuarial know-how as well as Legal, HR and IT expertise.
How does the new corporate structure affect you?
Having a distinct, stand-alone unit gives us transparency on the performance of the business and the levers we can use to improve that. It offers us more flexibility, helps us to be more cost-efficient and will allow us to demonstrate the key characteristics and opportunities of the business. We need all of this to attract third-party investment, which is a key goal
How will that investment work?
There is the potential to invest in a particular deal, or there may be interest in investing in a particular life company within the Admin Re® structure. We expect our focus to be towards investment in the Admin Re® holding company, Swiss Re Life Capital.
What about the policyholders?
Buying a closed book not only involves taking in policies and assets; we are also inheriting the relationship with the seller’s customers. Our business model is focused on keeping costs low, but we equally recognise the critical importance of our obligations to be consistent and fair with policyholders.