Swiss Re and SAP co-innovate for financial reporting and business steering in reinsurance and insurance
02 February 2017, Zurich
Swiss Re, a leading global re/insurer, today announced a strategic co-innovation initiative with SAP SE, market leader in enterprise application software. Working together, the two companies plan to develop a solution to address the increasingly complex demands related to financial steering and reporting of insurance companies from regulators across the globe.
Today insurance companies have to manage and report their business according to a large range of different valuations and regulatory reporting standards. Maintaining compliance and consistency is therefore a challenging process, especially as valuations are typically performed sequentially and with many redundancies. New regulations, such as International Financial Reporting Standards (IFRS) 9 and 17, will also enforce additional reporting requirements. These challenges make it difficult for insurers and reinsurers to capture reliable, comparable financial information for reporting and decision-making. They also significantly increase internal process complexity, reporting efforts and operating costs.
Swiss Re and SAP are working on a new approach to generate multiple valuations and apply financial steering methods based on the SAP HANA® platform, enabling processes to be automated and controlled in a simple, effective way. This new approach aims to:
- Manage increasing regulatory complexity with the ability to easily incorporate new valuations and reporting standards (such as IFRS and U.S. GAAP) on an ongoing basis
- Reduce reporting efforts by generating multiple financial valuations simultaneously
- Cut the time spent on operational tasks and controls, while increasing the capacity for analytics
- Create the ability to steer the allocation of financial resources
Over the last few years, Swiss Re and SAP have already made significant progress in this area. Swiss Re has applied its deep industry knowledge to create a sophisticated multiple-valuation accounting approach to resolve related operational and regulatory challenges. During the same time, SAP has made significant technology developments with SAP S/4HANA®, SAP HANA, and cloud-based solutions. By combining forces, SAP and Swiss Re aim to create a modular, flexible system based on SAP HANA, which will simplify operations and improve business productivity by seamlessly integrating operational, actuarial and analytical data processes. The solution, which we plan to make available over time to the entire re/insurance industry, will use a simple accounting and steering approach to run multiple valuations efficiently.
Gerhard Lohmann, CFO Reinsurance at Swiss Re, said: “We chose to work with SAP on this initiative, because it is a renowned software provider with a long and deep history of working with global insurance companies. I genuinely believe that together we can achieve our strategic vision to enable integrated steering and reporting for ourselves and across the industry.”
Luka Mucic, CFO and Member of the Executive Board of SAP SE, added:
“We are proud to work with Swiss Re, a company with profound industry knowledge, to drive the development of new solutions that will provide the insurance and financial sectors with a significantly simplified approach to solving their sophisticated needs. It’s our firm belief that co-innovation projects like these are what will guide and shape the future of our industry.”
Notes to editors
The Swiss Re Group is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. Dealing direct and working through brokers, its global client base consists of insurance companies, mid-to-large-sized corporations and public sector clients. From standard products to tailor-made coverage across all lines of business, Swiss Re deploys its capital strength, expertise and innovation power to enable the risk-taking upon which enterprise and progress in society depend. Founded in Zurich, Switzerland, in 1863, Swiss Re serves clients through a network of over 60 offices globally and is rated "AA-" by Standard & Poor's, "A1" by Moody's and "A+" by A.M. Best. Registered shares in the Swiss Re Group holding company, Swiss Re Ltd, are listed in accordance with the International Reporting Standard on the SIX Swiss Exchange and trade under the symbol SREN. For more information about Swiss Re Group, please visit: www.swissre.com or follow us on Twitter @SwissRe.
Cautionary note on forward-looking statements
Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets, and trends) and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact.
Forward-looking statements typically are identified by words or phrases such as “anticipate”, “assume”, “believe”, “continue”, “estimate”, “expect”, “foresee”, “intend”, “may increase”, “may fluctuate” and similar expressions, or by future or conditional verbs such as “will”, “should”, “would” and “could”. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the Group’s actual results of operations, financial condition, solvency ratios, capital or liquidity positions or prospects to be materially different from any future results of operations, financial condition, solvency ratios, capital or liquidity positions or prospects expressed or implied by such statements or cause Swiss Re to not achieve its published targets. Such factors include, among others:
- further instability affecting the global financial system and developments related thereto;
- further deterioration in global economic conditions;
- the Group’s ability to maintain sufficient liquidity and access to capital markets, including sufficient liquidity to cover potential recapture of reinsurance agreements, early calls of debt or debt-like arrangements and collateral calls due to actual or perceived deterioration of the Group’s financial strength or otherwise;
- the effect of market conditions, including the global equity and credit markets, and the level and volatility of equity prices, interest rates, credit spreads, currency values and other market indices, on the Group’s investment assets;
- changes in the Group’s investment result as a result of changes in its investment policy or the changed composition of its investment assets, and the impact of the timing of any such changes relative to changes in market conditions;
- uncertainties in valuing credit default swaps and other credit-related instruments;
- possible inability to realise amounts on sales of securities on the Group’s balance sheet equivalent to their mark-to-market values recorded for accounting purposes;
- the outcome of tax audits, the ability to realise tax loss carry forwards and the ability to realise deferred tax assets (including by reason of the mix of earnings in a jurisdiction or deemed change of control), which could negatively impact future earnings;
- the possibility that the Group’s hedging arrangements may not be effective;
- the lowering or loss of one of the financial strength or other ratings of one or more Swiss Re companies, and developments adversely affecting the Group’s ability to achieve improved ratings;
- the cyclicality of the reinsurance industry;
- uncertainties in estimating reserves;
- uncertainties in estimating future claims for purposes of financial reporting, particularly with respect to large natural catastrophes, as significant uncertainties may be involved in estimating losses from such events and preliminary estimates may be subject to change as new information becomes available;
- the frequency, severity and development of insured claim events;
- acts of terrorism and acts of war;
- mortality, morbidity and longevity experience;
- policy renewal and lapse rates;
- extraordinary events affecting the Group’s clients and other counterparties, such as bankruptcies, liquidations and other credit-related events;
- current, pending and future legislation and regulation affecting the Group or its ceding companies and the interpretation of legislation or regulations;
- legal actions or regulatory investigations or actions, including those in respect of industry requirements or business conduct rules of general applicability;
- changes in accounting standards;
- significant investments, acquisitions or dispositions, and any delays, unexpected costs or other issues experienced in connection with any such transactions;
- changing levels of competition; and
- operational factors, including the efficacy of risk management and other internal procedures in managing the foregoing risks.
These factors are not exhaustive. The Group operates in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
This communication is not intended to be a recommendation to buy, sell or hold securities and does not constitute an offer for the sale of, or the solicitation of an offer to buy, securities in any jurisdiction, including the United States. Any such offer will only be made by means of a prospectus or offering memorandum, and in compliance with applicable securities laws.
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