Global Risk Briefing for AmbassadorsTour d’horizon of the changing risk landscape from a reinsurer’s perspective by Martyn Parker, Chairman Global Partnerships, 10 March 2016
Ambassadors Meeting | Rüschlikon, 10 March 2016
• Swiss Re is a leading and highly diversified global re/insurance group, with 70 offices in more than 30 countries
• Swiss Re offers traditional reinsurance products and related services for property and casualty, as well as for life and health businesses. The Group also offers Commercial insurance through Corporate Solutions and manages closed books of life business via Admin Re®
• Swiss Re has both a superior capital rating1, more than USD 100 billion of assets under management and more than 150 years of experience
Swiss Re is a leading and highly diversified global re/insurance group
P&C Re50%
L&H Re36%
Corporate Solutions11%
Admin Re®3%
EMEA AsiaAmericas
44% 34% 22%
Net premiums earned2 2015 (USD 30.2bn)by region … and by business segment
1 as at 2 March 2016: Standard & Poor’s: AA- (stable); Moody’s Aa3 (stable); A.M. Best: A+ (stable)2 Includes fee income from policyholders
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Ambassadors Meeting | Rüschlikon, 10 March 2016 3
VISION:
We make the world more resilient.
MISSION:
Together, we apply fresh perspectives,
knowledge and capital to anticipate
and manage risk. That’s how we
create smarter solutions for our
clients, helping the world rebuild,
renew, and move forward.
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Ambassadors Meeting | Rüschlikon, 10 March 2016
Our motivation : The growing protection gapNatural catastrophe losses 1970 – 2015 (in 2015 USD billion)
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Source: Swiss Re Economic Research & Consulting and Cat Perils.
0
50
100
150
200
250
300
350
400
450
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Uninsured losses (nat-cat)
Insured losses (nat-cat)
10-year moving average insured losses
10-year moving average total economic losses
Ambassadors Meeting | Rüschlikon, 10 March 2016
Closing the protection gap and providing solutions for emerging risks will improve global resilience
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Nat Cat: USD 1.3 trillion 2005-20141
Mortality:USD 105 trillion globally2
Casualty accumulation:
e.g. estimated US asbestos litigation costs USD 85bn3
Connected car: EUR 50bn market of telematics-based car insurance by 2020?5
Connected health: 20% market share for
wearables-based health insurance
products by 2025?6
Emerging risk pools
Protection gap
Sources: 1 Swiss Re Sigma 5/2015 2 Swiss Re Economic Research & Consulting 3 Guy Carpenter September 20154 ABI Research and Swiss Re estimate 5 Ptolemus Consulting estimate 6 Roland Berger estimate
Cyber: USD 10bn market by 2020?4
Ambassadors Meeting | Rüschlikon, 10 March 2016 6
VietnamAgriculture yield cover
Pacific Islands Earthquake and
tropical cyclone risk
UruguayEnergy
production shortfalls
due to drought
IndiaWeather insurance
for farmers
CaribbeanHurricane,
earthquake and excess rainfall risk
BeijingAgricultural risk
TurkeyEarthquake pool
Louisiana Hurricane risk
MexicoEarthquake/hurricane
and livestock risk
BangladeshFlood
insurance
African Risk CapacityGovernment drought
insurance pool
FloridaHurricane risk
United KingdomFlood risk
Shenzhen typhoon/rainfall Thailand
Crop insurance
• First dedicated public sector team in the reinsurance industry
• Over 200 closed transactions since 2006
• Develop insurance, reinsurance and capital markets solutions onall perils (natural disasters, weather risks, pandemics, etc.)
• Global footprint
• Pioneer in emerging and industrialised markets
Public-private partnerships to address the protection gap
Ambassadors Meeting | Rüschlikon, 10 March 2016
2015/16 floods in the UK –a reminder of why Flood Re is needed
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Ambassadors Meeting | Rüschlikon, 10 March 2016
S&P calculates potential sovereign rating impact of natural catastrophes
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0 0.5 1 1.5 2 2.5 3
Dominican Republic…Chile EQ
Bangladesh TCJapan EQ
Vietnam TCPeru EQ
Thailand FLTurkey EQ
Philippines EQDominican Republic…
Italy EQMexico EQ
Hungary FLIsrael EQ
Colombia EQNew Zealand EQ
Indonesia EQPortugal EQPakistan EQ
Philippines TCAustria EQMexico TCGreece EQ
Hypothetical rating downgrade in notches
Net rating impact (select cases with more than 1/4 notch impact)
Flood
Tropical Cyclone
Earthquake
Source: Swiss Re, Standard & Poor's calculations. © Standard & Poor's 2015.
S&P states:
“…natural disasters (earthquakes, tropical
storms, floods, and winter storms), which can be
expected once in every 250 years, can weaken
sovereign ratings”.
“Insurance coverage can act as a mitigant”
Ambassadors Meeting | Rüschlikon, 10 March 2016
Tailwinds – expectancy on the insurance industry
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“…promote mechanisms for disaster risk transfer and insurance …. in order to reduce the financial impact of disasters …”
“One way to mitigate the economic and ratings impact of natural disasters is catastrophe insurance.”
“Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all”.
“The G7 initiative on climate risk insurance aims to increase the number of people covered by this kind of insurance by 400 million by 2020”.
Ambassadors Meeting | Rüschlikon, 10 March 2016
New partnership with Veolia arising from 100 Resilient Cities initiative
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“Cities don’t just need money to pay for recovery. They need their infrastructure and services to be up and running”
Andrew Salkin, Chief Operating Officer, 100 Resilient Cities
• 100RC challenged Swiss Re and Veolia to develop a comprehensive solution to address the needs of cities covering both recovery of critical services and the required funding.
• Swiss Re, a leading reinsurance company, assists cities in understanding their risk exposures and risk transfer needs.
• Veolia, an international infrastructure company, manages and improves the infrastructure assets of cities in the energy, water and waste management.
Ambassadors Meeting | Rüschlikon, 10 March 2016
Swiss Re's commitment 2014 UN Climate Summit in NYC
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"By the year 2020, Swiss Re commits to have
advised 50 sovereigns and sub-sovereigns on
climate risk resilience and to have offered them
protection of USD 10bn against this risk."
Michel LièsCEO Swiss Re Group
Legal notice
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