140th anniversary: Swiss Re's foundation
For Gottfried Keller, Zurich’s native poet and first secretary of its cantonal government, the document he signed on 19 December 1863 was probably much like any other. It was on this Saturday exactly 140 years ago that the Council of the Canton of Zurich dictated to him the following:
“The Swiss Reinsurance Company in Zurich, having submitted its articles of association, is hereby authorised by the Council, on the basis of said articles…” The largest shareholder was a bank founded seven years previously by Alfred Escher, the Schweizerische Kreditanstalt – today’s Credit Suisse.
At the time, the insurance business had been booming for several years in Switzerland, gaining steadily in economic importance. However, in the runaway competition that resulted, insurers were tempted into underwriting larger and larger risks. The May 1861 fire that devastated two-thirds of the town of Glarus, 40 miles from Zurich, had been an unmistakable wake-up call. One catastrophic event, it was now clear, could inflict losses far beyond the ability of any primary insurer to pay.
Yet despite a demonstrable demand for reinsurance, the founding of the Swiss Reinsurance Company was a step into the unknown for the nascent financial centre of Zurich. There was considerable risk involved. Reinsurance business was supported on three pillars: capital, experience, and luck. Of these three, the new company could depend on one alone: capital.
The new company concluded its first reinsurance treaty with one of its cofounders, the Helvetia General, in January 1864. Almost ironically, this first agreement covered marine insurance. This was not the most likely form of business for a reinsurance company seeking to establish itself over a hundred miles from – and over a thousand feet above – any coast!
Nonetheless, at the end of that first business year, the Board of Directors could declare themselves “rather gratified at the results”.
This article was issued by Records Management / Company Archives.
Find out more about Swiss Re's Corporate History.
