Differentiation and client services are key to value creation; decline of nat cat rates expected to slow

15 September 2014, Monte Carlo

  • Swiss Re highlights its bottom line focus in a softening market environment
  • Swiss Re aims to consolidate its position as the preferred reinsurance partner and has made solid progress towards achieving this ambition over the last few years
  • A key component of Swiss Re's value proposition is proprietary R&D, such as forward-looking liability risk modelling
  • Swiss Re expects a slowing of decrease in nat cat prices; mixed pricing trends in other lines of businesses

Swiss Re continues to be fully committed to its strategy and its 'smarter together' brand promise. It aspires to be the preferred reinsurance partner to its clients. Strong customer relationship management and close interactions with clients across the value chain are seen as key differentiators. Through cutting-edge in-house R&D, Swiss Re provides applied expertise to its clients and thus enhances its value proposition.

Michel M. Liès, Swiss Re Group CEO, says: "In my 35 years of experience in the business, I've seen many turns of the reinsurance cycle and have learned that pricing is only one dimension of it. In order to succeed, you need to develop your business model based on a deep understanding of market fundamentals, participants' behaviours and the evolution of your clients' needs. Rigorous cycle management, portfolio steering and underwriting discipline remain the obvious tools for profitable success. There are opportunities for our industry - especially in high growth markets. We remain firmly focused on the bottom line and are making sure that we support our clients to successfully capture the profitable opportunities they are pursuing."

Success in reinsurance markets
Swiss Re's strategy remains unchanged and its brand promise of 'smarter together' is central to delivering on the strategy. Swiss Re aspires to be the preferred reinsurance partner for its clients, based on close interaction with them across the entire value chain. In addition to reinsurance capacity, Swiss Re provides a wide array of services that include strategic advice, product development, knowledge exchange platforms and risk modelling and identification. In the Flaspöhler client satisfaction survey, Swiss Re has progressed over the years and now occupies the top slot across the regions of North America, EMEA and Asia.

Christian Mumenthaler, CEO Reinsurance at Swiss Re says: "Our business model is based on being very close to our clients through daily interactions and a full range of services. This means that we understand the needs of our clients and can deliver fit for purpose solutions. This level of interaction differentiates a true reinsurance partner from a simple risk transfer mechanism."

Applied expertise for casualty growth
Swiss Re has several business lines which offer attractive opportunities, among them is casualty reinsurance. In this area, Swiss Re will continue to carefully expand its book of business, subject to meeting its minimum return hurdles and pricing levels. In this year's renewals, Swiss Re has increased the share of casualty in its P&C treaty business up for renewal from 32% to 42%.

Casualty growth is accompanied by strong investment in research and development. Among the advances that have been made, Swiss Re's Liability Risk Drivers™ approach allows insurers to identify the factors shaping the liability risk landscape going forward. Further, the use of forward-looking models, which are less dependent on historical data, allows underwriters to write business in markets where information on claims experience may be scarce.

Jayne Plunkett, Division Head of Casualty Underwriting, says: "Our clients understand that liability risks are dynamic. A better understanding of liability risk drivers can help to prevent, or at least mitigate, the types of crises and market failures we have seen in liability in the past. A more knowledge-based approach to liability underwriting adds value to Swiss Re's clients."

Decrease in nat cat prices expected to slow
Swiss Re expects a slowing in the decline of natural catastrophe prices. Over the medium to long term, economic growth and increased wealth are leading to stronger middle classes and higher economic values in exposed areas. These dynamics, together with an increasing frequency of extreme weather events, are expected to boost demand for natural catastrophe cover. Swiss Re expects this demand to increase by approximately 50% in mature markets and 100 % in high growth markets from 2012 to 2020.

Dial-in details to the Media Briefing
If you would like to dial in to the Swiss Re Media Briefing in Monte Carlo on Monday, 15 September from 2:15pm to 3:30pm CEST, please use the following phone numbers:


+41 (0)58 310 50 00


+49 (0)69 25 511 4445


+33 (0)1 7091 8706


+44 (0)20 3059 5862

USA +1 (1) 631 570 5613

You are kindly requested to dial into the conference call 10 minutes prior to the scheduled start time.

The presentation slides can be downloaded here.

Swiss Re
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, "Aa3" 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 Main 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, liquidity position or prospects to be materially different from any future results of operations, financial condition, solvency ratios, liquidity position or prospects expressed or implied by such statements. Such factors include, among others:

  • instability affecting the global financial system and developments related thereto;
  • 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 carryforwards 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.