Jonathan Rake, CEO of APAC, Swiss Re Corporate Solutions, suggests that the region is wide open for innovation, as it is not bound by legacy challenges, with firms embracing the new digital age.
Rake’s comments stem from an interview with Reinsurance News, in which he noted that Swiss Re Corporate Solutions has rallied around two main pillars in recent years, sustainable earnings, and relevance for customers.
“Everything that we do, through our strategies and initiatives, is to underpin one or both of those pillars,” he explained.
According to Rake, the process of developing a stronger and more sustainable portfolio in APAC included either addressing underperforming accounts or in some cases, exiting them altogether.
He continued, “On the other side of that, where we were strong, where we did see opportunity, we went in with investment and doubled down on strategies.
“In APAC, we’re quite pleased with where we are at and what we’ve been able to deliver, though it’s required some tough decisions along the way.”
Adding more to the customer relevance pillar, Rake stated that “getting in early and not hiding away from the realities of the difficult decisions you’ve taken, is very key.”
He insisted that the company has also challenged itself in recent years to not just be on the receiving end of innovation, but to incubate and deliver it, as he noted, “This is a region ripe for innovation.”
Growth potential
Discussing growth in Asia Pacific, Rake noted that the macro picture is favourable, which has incentivised many insurance companies to seek opportunities in the region.
Citing a report from McKinsey Global Institute, Rake said that by 2040, Asia itself will contribute half of the total global GDP.
“That’s a long way from where we are today, though we see the economies across Asia growing with healthy mid to high single-digit GDP, whilst also being somewhat sheltered from a lot of the shocks that global markets are experiencing right now.
“There’s also a theme around the growth of corporates in Asia, ie, mid-size companies becoming corporates, becoming large multinational corporations. Inherently, because we participate in that space, there’s a real opportunity for growth just by having a presence here.”
Indeed, Rake suggested that APAC is open to innovation not only because of necessity. “You don’t necessarily have the long legacy challenges that can be apparent in more advanced markets, where companies may have been operating for hundreds of years..”
Rake declared that Swiss Re Corporate Solutions operates well in this innovative space with its various risk solutions, and plans to make the most of big opportunities in the future. One example he cited was “Growthsurance”, which the insurer created as a means to enable businesses to achieve revenue growth and reduce the risk of not meeting targets.
Elsewhere in the interview, he outlined some potential obstacles in the region, firstly highlighting the protection gap.
“There’s an insurance penetration challenge, some of that has been the industry’s fault, some of it a misunderstanding of insurance, but clearly, there’s a long way to go,” Rake said.
Swiss Re recently released a report reiterating this point, noting that closing the global protection gap for natural catastrophes, crop, mortality, and health insurance would require $1.8 trillion in insurance premium annually.
Partnerships are crucial
Meanwhile, Rake also noted the importance of partnerships in the region, stating, “We can’t do it alone. While we’re in the markets that we want to be, there is still a whitespace if you look at it from a country perspective.”
As an example of the benefits of forming strong partnerships in the region, Rake disclosed how the firm had recently joined forces with a Japanese company that manufactures seismographs.
“This tool allows you to have quick access to more accurate seismic data, which helps us significantly in our offering when you think about parametric solutions and earthquake cover.
“It’s partnerships like this where you get a neat offering that’s not just about insurance/risk transfer, it’s actually about mitigation and real-time data.”
Rake also gave an example of Swiss Re Corporate Solutions partnering with the European bank NORD/LB to create a $500 million ESG co-investment programme, which he explained is “all about unlocking green infrastructure investments.”
Unlocking data insights
In the final section of the interview, we asked Rake what insights can be derived from data with respect to managing emerging and unanticipated risks.
He answered, “Before you have usable insights, you need to have quality, clean, structured data.
“We all know there’s a vast amount of data available and it’s multiplying constantly, but to utilise it is a big step. An even bigger step is to not only have the insights, but to build relevant solutions.”
Rake continued, “In recent years, we’ve invested heavily in establishing a data warehouse where all our systems and capabilities can pull [data] from.
“We’re also exploring where we can bring customers and partners in so we can start to stress test our models [in a safe data environment], and that helps us to develop more relevant solutions.
“If you’re thinking about risk modelling, having deeper, more accurate data and insights is going to make a significant improvement on your risk profiling ability and your risk accuracy.
“What that means is you can start to provide bespoke solutions for companies as opposed to more generic solutions where you just didn’t have the data about that specific organisation’s risk profile.”
Turning to a more climate-orientated theme, Rake said that nowadays, companies need to consider the sustainability of their operations, as well as their energy transition.
“This multi-dimensional view is a challenge for the industry because as insurers, we’ve now got to have a holistic conversation with risk managers.
“That’s where data is powerful, because before, where you might have needed to speak to 10 experts, if you’ve got the data, you can apply these various models to regulation, climate risk, scenario testing and others.
“This is how we look at it, and these are the moves you can make to be better protected in the future across several different dimensions.”
Strategic priorities
In conclusion, we asked Rake about his priorities for this year, to which he said, “From a business perspective, we’ve got a good focus right now and we’ve worked hard to get to this position. We are in execution mode.
“We’re looking to have another year of strong top-line growth and profitability, it’s an exciting time in APAC, let’s keep going.”
