Executives at global reinsurance giant Swiss Re have said that at this point, the impacts of the current crisis around the COVID-19 pandemic on the company is viewed as “being absolutely manageable.”
In a letter to shareholders, clients and partners, Walter B. Kielholz, Chairman of the Board of Directors and Christian Mumenthaler, Group Chief Executive Officer (CEO) at Swiss Re, have addressed the ongoing COVID-19 coronavirus pandemic.
For insurers and reinsurers there remains much uncertainty around the potential financial implications caused by the pandemic. Certain lines of business, such as travel and event cancellation, are expected to see some sizeable losses, while debate around the volume of business interruption losses will likely continue for some time.
The pair note that Swiss Re leverages a proprietary pandemic model to assess scenarios and enable active monitoring of the event, adding that it continues to handle claims, renew contracts, share knowledge and innovate.
Swiss Re is exposed to the current pandemic through its Life & Health and Property & Casualty units, while its investment portfolio is also expected to be impacted by current market dislocation.
The Switzerland-based reinsurer announced recently that it had a $250 million exposure to the cancellation of the Tokyo Olympic games, an event now delayed until 2021. Typically, cancellation coverages provide protection against delays as well as the total cancellation. However, currently the terms of these Olympic insurance contracts are unknown.
But despite any hit from the Olympics and potential losses in other lines, Kielholz and Mumenthaler state that, “While it is too early to estimate the impact of the current crisis on Swiss Re, at this point we assess it as being absolutely manageable.”
They continue to highlight Swiss Re’s industry-leading capital position, significant financial flexibility and conservative investment portfolio that effectively mitigates some of the economic impacts of financial market volatility.
“We are confident that we will make a positive contribution in this crisis, thanks to our deep risk knowledge, close client relationships and capital strength. Swiss Re’s own business remains resilient in the current environment and is needed now more than ever. As the global economy, governments and society weather this situation, Swiss Re will continue to be the strong partner you can rely on,” said Kielholz and Mumenthaler.