The role of Swiss Re – a global reinsurer in Switzerland

Transcription

Reinsurance in Europe:
The role of Swiss Re –
a global reinsurer in Switzerland
FORUM@insurance
Brussels
17 October 2006
Agostino Galvagni, Swiss Re
Content
FORUM@insurance
Brussels
17 October 2006
Slide 2

Reinsurance and its value proposition

Current reinsurance challenges

Swiss Re’s role in the European reinsurance sector

Conclusions
What is reinsurance?
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17 October 2006
Slide 3

Insurance for insurers!

Reduces volatility of insurers’ results

Provides capital relief and flexible financing to insurers

Grants insurers access to expertise and services,
especially in the fields of product development, pricing
and underwriting and claims management
Reinsurance is the most important risk and capital
management tool available to insurers
Size of the reinsurance market:
EUR 134bn, thereof EU: EUR 39bn
Globally, 11% of
direct premiums
is passed to
reinsurers
(except for
saving-type life
business)
49%
1%
Rest of EU 10%
3%
France 4%
Germany 7%
12%
United Kingdom 8%
6%
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17 October 2006
Slide 4
EU
Switzerland
North America
2005 figures, excl. cessions to affiliated companies
Source: Swiss Re Economic Research & Consulting
Latin America
Asia
Rest of World
Content
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17 October 2006
Slide 5

Conclusions
Growing values in exposed areas
are a major driver of higher losses
Ocean Drive, Miami, 1926
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17 October 2006
Slide 6
Ocean Drive, Miami, 2000
X The number of Floridians increased by 70% from 1980
to 2001, while state GDP soared by 130%
Katrina, Rita and Wilma (KRW)
Large caps equipped to handle large events
KRW total loss to
(re)insurance
industry:
EUR 67bn
Market capitalisation (USD)
USD m
> 15bn
5 – 15bn
< 5bn
5 000
75%
144%
Average net claim
in % of shareholders'
equity = 43%
4 000
3 000
60%
45%
Swiss Re*
2 000
30%
1 000
15%
0
0%
FORUM@insurance
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17 October 2006
Notes:
Slide 7
* Swiss Re claims estimate net of equalisation reserve release
Shareholders’ equity as of 2004;
market cap as of 30.01. 2006
Current net claims estimate (before tax)
Net claim in % of shareholders' equity
Source: Company data
Main challenges faced by the reinsurance industry
1. Scale
¾ Capital markets can help
2. Diversification (by geography, by line of business)
¾ Recognition by regulators & rating agencies…
3. Risk management, incl.
a) dealing with emerging risks
¾ Recognition by regulators & rating agencies
b) dealing with unlimited covers
¾ Recognition by legislators…
FORUM@insurance
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17 October 2006
Slide 8
Content
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17 October 2006
Slide 9

Conclusions
Swiss Re in the EU
Reinsurance/Insurance Carrier
Branches/Permanent Establishment
Rep Offices
Swiss Re staff in the EU:
approx. 3200 (~30% of total)
Swiss Re’s premium
volume in the EU:
EUR 6.4bn
(33% of total)
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17 October 2006
Slide 10
United Kingdom, EUR 1773m
France, EUR 789m
Italy, EUR 587m
Note: 2005 gross premiums written, staff as at 30 September 2006
Netherlands, EUR 430m
Germany, EUR 1205m
Swiss Re for the EU
Swiss Re single event exposures, 200 year return period as of 30.06.2006
EURbn
4.0
3.6
3.8
2.9
2.6
2.7
3.0
2.0
1.9
2.0
1.3
1.0
1.2
1.0
0.0
Gross
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17 October 2006
Slide 11
Net
European
windstorm
Swiss Re
Gross
Net
Atlantic
hurricane
Gross
Net
California
earthquake
Insurance Solutions
Gross
Net
Japanese
earthquake
Gross
Japanese
typhoons
Combined net exposure*
* Net of estimated hedging impacts (cat bonds, industry loss warranties, retrocessions)
Net
Content
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17 October 2006
Slide 12

Conclusions
Conclusions
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17 October 2006
Slide 13

The EU is a key market for Swiss Re

Swiss Re serves the EU clients locally, but provides them
with the benefits of its global knowledge, worldwide
diversification and financial strengths

Swiss Re welcomes the introduction of Solvency II as
risk-based solvency regimes will encourage sound risk
management practices and proper governance
structures
In particular, diversification as well as risk mitigation
measures - including derivatives, reinsurance and
securitization - should find appropriate consideration
Appendix
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17 October 2006
Slide 14
Reinsurance reduces volatility of insurers’ results
Overall French non-life market,
3
EURbn
1.5
0
-1.5
-3
-4.5
-6
-7.5
Winter storm Lothar
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17 October 2006
Slide 15
Underwriting result before reinsurance
Sources: FFSA, Swiss Re Economic Research & Consulting
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
-9
Underwriting result after reinsurance
Acquiring GEIS, Swiss Re consolidates
its global leadership position
Top professional reinsurers by net
premiums earned 2005 (USDm)
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17 October 2006
Slide 16
P&C
market share %*
L&H
market share %*
Swiss Re
22 336
10.6
20.7
Munich Re
24 020
12.1
19.9
Berkshire Hathaway Group 10 398
6.2
5.6
Hannover Re
9 633
5.2
6.9
GE Insurance Solutions
7 136
3.5
6.3
XL Capital
5 009
2.1
5.6
RGA
3 867
--
9.5
Partner Re
3 599
2.4
1.1
Transatlantic Re
3 385
2.6
--
Munich Re: Including intra-group transactions with NPE of USD 2 073m
Gen Re: Gen Re and Berkshire Hathaway Re combined had NPE of USD 10 398m
* Note that not all companies released their financial reports 2005. For these companies (eg
CCR, Korean Re, Revios), 2004 figures were taken into account.
Source: Strategy Development based on publicly available data
Reinsurance in Europe:
The role of Swiss Re –
a global reinsurer in Switzerland
FORUM@insurance
Brussels
17 October 2006