Swiss Re is hosting an “Investors Day” Conference in London focused on the current state of the reinsurance market, its future prospects and the potential reguylatory changes affecting capital.
The reinsurer 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 percent annually and the life and health industry to grow by 3.7 percent.
Swiss Re also expects further consolidation “within the insurance sector.” In addition it foresees capital concerns remaining “an industry issue” with “upcoming regulatory frameworks, such as the Swiss Solvency Test or Solvency II,” being “likely to influence (re)insurers’ returns in the years to come.”
CEO Stefan Lippe commented: “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, explained how, in the 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,” he stated. “We will continue to optimize the investment portfolio with a clear allocation of risk capital and responsibilities.”
The conference report points out that the Swiss Solvency Test capital requirements will become effective at the beginning of 2011. George Quinn, Swiss Re’s CFO, explained that 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.”
Swiss Re also amended its loss estimates from the earthquake in Chile earthquake, indicating that “net of retrocession, to be approximately $630 million before tax.” In its preliminary estimate on March 10, Swiss Re estimated its own claims at around $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,” said the bulletin.
Source: Swiss Re
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