Solvency II at Swiss Re

Swiss Re is extensively affected by Solvency II through our Europe-based subsidiaries despite being headquartered outside the European Economic Area (EEA). Our Swiss subsidiaries are regulated by the Swiss Solvency Test, which in some cases is stricter than the provisions set out by Solvency II

Swiss Re strongly supports Solvency II since it is based on economic principles (similar to SST) and supports harmonized implementation across Europe. We continuously work with clients, regulators, rating agencies and financial analysts to help implement appropriate capital models, reach meaningful disclosure levels and make the benefits of reinsurance business more apparent. Swiss Re participates in various industrial platforms, such as the Geneva Association, the Pan-European Insurance Forum, and the Chief Risk Officer Forum, to reach joint industry positions in response to specific aspects of the Solvency II project and the challenges related to its implementation.

Swiss Re's legal entities in the EEA, including Swiss Re Europe S.A., Swiss Re International SE in Luxembourg, and Admin Re in the UK, are prepared to comply with Solvency II as of 1 January 2016. We successfully completed our Solvency II implementation project in January 2014. While each of our legal entities in the EEA will be supervised under Solvency II, the group will continue to be supervised by our Swiss group supervisor the Swiss Financial Market Supervisory Authority (FINMA) under the SST, which we expect to be declared equivalent to Solvency II by the Commission.

Under the SST, the Swiss Re Group adopted an economic and risk based regime ahead of Solvency II, which we also use to steer our capital. Based on 99.5% Value-at-risk, Solvency II will not increase our required capital since SST is based on 99% Tail Value-at-risk - a more conservative risk measure for our reinsurance business.

Swiss Re has developed an internal model which the Group is already using to calculate its SST target capital. The model has been adapted for Solvency II and will be used by Swiss Re's major legal entities in the EU. The model is currently awaiting regulatory approval, and we expect supervisors will approve applications by April 2015.

Swiss Re also welcomes the principles-based approach of pillar 2 and the forward looking perspective of Own Risk and Solvency Assessment (ORSA). This allows us to maintain and develop a consistent risk management system across the Group which avoids loopholes as the consequence of a fragmented approach. For example we have rolled out ORSA not only in Europe but also in other locations worldwide where ORSA has been adopted by local supervisors.

While Swiss Re already discloses the Group's solvency position under SST, we are currently preparing our reporting systems for the production of Solvency II reports that use the latest available draft reporting templates. We already report on some Solvency II figures to our EEA supervisors as locally required under EIOPA's interim measures and we are preparing for full-scale reporting in annual dry-runs before Solvency II starts (pending finalisation of the reporting templates). Once Solvency II is in place, we will be able to submit reporting information electronically to the supervisors and publicly disclose Solvency II figures for our EEA legal entities as required.         

For more than 150 years, Swiss Re has been at the core of the global reinsurance industry. Our readiness to help others embrace Solvency II reflects the extent of our regulatory experience and the strength of our reputation as a global (re)insurance expert. It also demonstrates our commitment to our clients and the solidity of our long-term partnerships.

Contact us to find out how our "smarter together" approach can strengthen our mutual preparedness for new, exciting times.

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