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

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.


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