Swiss Re’s CFO Quinn Sees No Rebound in 2014 Reinsurance fees

Reinsurance charges, particularly for natural catastrophe coverage, likely gained’t growth this yr, stated Swiss Re Ltd.’s chief economic officer.

charges will handiest begin to upward thrust once more while there's a few “capital depletion” due to market volatility or a costly catastrophe along with an earthquake, said George Quinn in an interview in Zurich these days. “It’s unlikely costs will rebound in 2014.”

Reinsurers, which help primary insurers shoulder risks in return for a share of the charges, saw prices for assets- catastrophe rules decline eleven percentage at some stage in Jan. 1 agreement renewals amid an oversupply of capital, in step with guy chippie, the reinsurance dealer of Marsh & McLennan Cos. fees also fell for most different forms of coverage.

“The inflow of alternative capital actually has some effect, but we think it's far extra just the ordinary deliver and demand,” Quinn stated. agencies are convalescing from the financial crisis and there are fewer expensive catastrophes, main to less reinsurance business, he said. “As a end result there's an excess of supply and expenses react accordingly.”

A flood of capital from traders and decrease-than-average losses from natural disasters supposed that supply frequently outstripped demand in the latest renewals, man wood worker stated. The reinsurance enterprise had approximately $322 billion in committed capital at the cease of 2013, nearly a record degree, in step with the broker.

greater Investments

Swiss Re has decreased the natural catastrophe insurance it sells in choose of casualty reinsurance, in keeping with Quinn. The company raised the weighting of casualty insurance to 44 percentage from 36 percentage, and might increase it similarly, he stated. “The relative beauty of casualty is better, and so long as that remains so we might write extra enterprise.”

Swiss Re stated today that its prices for property-catastrophe guidelines declined three.6 percent in the Jan. 1 renewals, whilst its commercial enterprise quantity fell 6 percentage. The organization, which renews 60 percentage of its non-life contracts in January, said it expects much less “margin erosion” in its herbal catastrophe commercial enterprise during April and July, the next essential renewal dates.

to enhance boom, Swiss Re could make similarly investments which includes those it made last year in what it calls excessive growth markets including Asia, consistent with Quinn.

“From a threat urge for food angle we're near the bounds, but that doesn’t mean to say the portfolio cannot be reshuffled, some locations can be divested and new investments can be made,” he stated.

Swiss Re sold a stake in New China lifestyles coverage Co. from Zurich coverage institution AG in November for approximately $493 million and a holding in Brazilian insurer Sul the united states SA for $334 million. In October, it invested as much as $425 million in Hong Kong billionaire Richard Li’s FWD institution.

Quinn will depart Swiss Re on might also 1st to turn out to be CFO at Zurich insurance group AG, the biggest Swiss insurer. he'll get replaced by way of chief threat Officer David Cole.