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Swiss Re Sees Growth As Moderate Over Next Decade, Updates Chilean Earthquake Losses

Source: Swiss Re

Posted on 11 Jun 2010

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At the Swiss Re Investor's Day conference on Thursday, the company said it expects the growth outlook for the reinsurance industry in the next decade to be moderate but stable.

The company estimates the non-life industry will grow on average by 6.5% annually and the life and health industry to grow by 3.7%. According to Swiss Re, consolidation within the insurance sector will continue and capital remains an industry issue. Upcoming regulatory frameworks, such as the Swiss Solvency Test or Solvency II, are likely to influence (re)insurers’ returns in the years to come.

In his update on the Group’s business priorities, Stefan Lippe, Swiss Re’s Chief Executive Officer, comments: “Against the background of this market outlook, we will build further on what we are good at: delivering superior performance in (re)insurance, Admin Re® and Asset Management, while expanding our business in the areas of industrial risks insurance, longevity and emerging markets. Our mission is clear: we aim to be the leading player in the wholesale (re)insurance industry.”

David Blumer, Swiss Re’s Chief Investment Officer, explains how, in this changing environment, the company’s Asset Management will continue to contribute to the Group’s performance: “Swiss Re has a transparent, disciplined and flexible investment process in place, with investment decisions taken from a strict asset-liability-matching perspective. We will continue to optimize the investment portfolio with a clear allocation of risk capital and responsibilities.”

From the beginning of 2011, the Swiss Solvency Test capital requirements will become effective. George Quinn, Swiss Re’s Chief Financial Officer, comments: “From a capital management perspective, we are glad to see that capital measures are becoming more consistent and economic with the convergence of Swiss Re’s internal model, the Swiss Solvency Test and Solvency II.” He concludes: “Our experience in implementing the Swiss Solvency Test and our economic capital strength position us well to support our clients in preparing for Solvency II.”

Update on Chile earthquake estimate

Swiss Re expects its claims from the Chile earthquake, net of retrocession, to be approximately USD 630 million before tax. In its preliminary estimate of 10 March 2010, Swiss Re estimated own claims of around USD 500 million. The new estimate reflects more specific information from clients on actual damage to individual properties and businesses. The final cost remains subject to change.