Swiss Re recently announced plans to further strengthen its commitment to Asia by establishing a dedicated regional legal entity in Singapore for its Reinsurance business unit. 

This legal entity will, at the same time, become Swiss Re’s regional headquarters for its network of reinsurance operations in Asia.

The company, Swiss Re Asia, will be wholly-owned by its Zurich-based global parent, Swiss Re Ltd, and will share Swiss Re’s group credit rating. The Asian operations will remain strongly capitalised in line with regulatory requirements and its local business will continue to be supported by the financial resources of the Swiss Re Group.

This move also aligns the company’s legal entity structure across its Asia, Europe and Americas regions. Swiss Re Asia will continue to serve its clients and partners across the region through its network of offices, mirroring its existing footprint in Australia, China, Hong Kong, India, Japan, Korea, Malaysia and Singapore.

Swiss Re Chief Executive Officer Reinsurance Asia, Jayne Plunkett, says: “This move demonstrates our commitment to Asia as we become even closer to the market. As one of Asia’s largest reinsurers, we will continue to combine our global knowledge with even deeper insights into local and industry needs, to benefit our clients and partners.”

The Asian insurance sector has seen strong growth over the past decade, with the region now accounting for 30% of global insurance premiums, compared to 20% in 2007. The outlook remains robust. Swiss Re expects the region’s non-life and life premiums to grow by 5% and 6% respectively, in real terms per annum in the coming decade. Emerging Asian insurance markets will grow even faster.

Plunkett adds: “To embrace the fast growing insurance industry, we are committed to the growth of our talent base. This change will provide our employees with more opportunities for personal growth within the region itself.” Swiss Re expects the Singapore-based entity and regional headquarters to be established in 2018, and the office network realigned to the new structure by 2020, subject to regulatory approval. The new structure of the reinsurance business will not affect Swiss Re Corporate Solutions in Asia.

Building on its strong presence since 1956, Swiss Re Hong Kong branch will continue to be the Asian hub for the company’s Life & Health business. It will also remain as the base for a number of its Property & Casualty teams.  

During this process, business will continue as normal for Swiss Re’s clients and partners. The terms and conditions of agreements with Swiss Re, as well as the company’s obligations, remain unchanged. Clients and partners will also continue to be served by the same local teams, to support the continuous growth within the insurance sector.

Swiss Re has been associated with Asia since 1913 and has over 1,900 employees in the region.

Swiss Re Q1 profit nearly halves after Cyclone Debbie blow

ZURICH (Reuters): First-quarter net profit at Swiss Re, the world’s second-largest reinsurer, fell nearly 47% after outlays on claims from Australia’s Cyclone Debbie stripped $350 million from its bottom line, it said on Thursday.

The drop in profit, which fell shy of analyst estimates in a Reuters poll, was offset by better-than-expected underwriting profitability.

Shares were indicated 1.1% higher in pre-market trade. Swiss Re and other reinsurers act as financial backstops for insurance companies, helping them cover the cost of claims from natural and manmade disasters.

Cyclone Debbie in late March slammed into tourist resorts in Australia’s Queensland region and shut coal mines and commercial centres over a 1,000-km stretch. Swiss Re took the biggest hit from what it estimated to be a $1.3 billion industry loss.

Its first-quarter property and casualty combined ratio, a measure of underwriting profitability, rose to 95.6% on the back of Debbie’s impact. A figure below 100% indicates a profit. Swiss Re in February said it expects a P&C combined ratio of around 100% this year, meaning it expects to collect roughly as much in premiums as it will have to pay out in claims.

At group level, gross incoming premiums fell 10.5% as the reinsurer turned down more business in response to falling industry prices. Price falls continued at a similar pace during the industry’s April renewals round, Swiss Re said on Thursday, and the group wrote 2% less business during the round.

“We have responded decisively to the continued pricing pressure across the industry by not accepting unprofitable business, and our top line clearly shows that,” Chief Executive Christian Mumenthaler said in a statement.

German rival Munich Re – which expects profit to fall 8-15% this year due to low interest rates, continued price declines and technology investments – posts first-quarter results on May 9.