Simplified Business Model
New regulations and potentially higher solvency requirements add pressure to insurers’ balance sheets and increase the need for capital. Changes in regulatory standards may lead insurers to increase investments in low-risk, low-return assets.
Swiss Re has longstanding experience with solvency standards based on economic principles, specifically the Swiss Solvency Test. Clients can benefit from our diversification and capital strength as they seek capital relief solutions.
|Changing client needs
Alongside the challenges that lie ahead for the (re)insurance industry, such as regulation, (re)insurance clients are demanding services – ranging from comprehensive to standardised solutions – that meet the specific needs of their business models.
Standing at the forefront of new research and product development, Swiss Re offers expertise and experience, as well as insurance capacity. Our innovative solutions prove we can deliver value in a competitive market. At the same time, our new dedicated client service model allows us to offer clients solutions that are tailored to their specific needs.
Property and casualty is going through an advanced phase of the soft cycle. Fierce competition combined with abundant capital leads to weaker underlying underwriting performance within the sector.
|Active cycle management
We remain committed to active cycle management and portfolio steering, and deploy capital to those lines of business where we expect to achieve an economically profitable return. We will continue to focus on writing profitable business, while opening up new sources of income through our capacity for innovation.
|Low interest rates
Risk-free interest rates are extremely low. Low investment yields force (re)insurers to focus on underwriting profitability. This will give a competitive advantage to companies with a strong combined ratio history.
Our Asset Management manages the assets Swiss Re generates through its business activities. Prudent investment decisions are taken from a strict asset-liability management perspective. This allows us to optimise risk-adjusted economic profit while navigating volatile financial markets.
|Increasing catastrophe losses
Natural catastrophes are becoming increasingly severe, but many risks are not sufficiently insured. The 2010 Haiti earthquake and Pakistan floods, amongst the most deadly events since 1990, generated hardly any insured losses, yet set back their respective countries’ developments for years.
|Making societies more resilient
To help secure the prospects of developing countries, Swiss Re – together with the World Bank Group and national governments – has pioneered a number of new risk transfer solutions that make societies more resilient in the event of a disaster.
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