RÚBÉN GÓMEZ MORENO
Málaga 16 de mayo de 2014
Conceptos básicos del
reaseguro: El caso de Swiss Re
Agenda

Bas ic conce pts of re ins urance
•
A de finition of re ins urance
•
Why is the re a ne e d for re ins urance ?
•
Type s of re ins urance
Example s
•

Re ins urance marke t
•
Introduction to Swis s Re
2
Basic concepts of
reinsurance
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A definition of reinsurance
“Reinsurance is insurance for insurance companies.”
More precisely, “Reinsurance is the transfer of part of the risks that a direct insurer assumes by
way of insurance contract on behalf of an insured, to a second insurance carrier, the reinsurer,
who has no direct contractual relationship with the insured.”
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Why is the re a ne e d for re ins urance ?

Risk transfer
….to allow the ceding insurance company to write and assume individual risks that are
greater than its capital size would allow. Reinsurance also protects insurers against
catastrophic losses.

Substitute for risk capital
….to lowe r capital costs. Inve stors expe ct an ade quate return on the ir inve stme nt.

Income smoothing
…to smooth out the financial re sults of an insurance company, making the m more
pre dictable by absorbing large r losse s. This e nable s e asie r busine ss planning and
financial proje ctions.

Provide expertise to cedents
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Types of reinsurance
 Facultative versus treaty reinsurance
Facultative reinsurance is re insurance for individual risks. The dire ct
insure r choose s fre e ly which particular, individual risks he wants to offe r to
a re insure r.
Treaty reinsurance is re insurance for e ntire portfolios: automatic re insurance .
 Proportional versus non proportional reinsurance
With the proportional insurance the dire ct insure r and the re insure r divide
pre miums and losse s betwe e n the m at a contractually defined ratio (quota
share s and surplus).
With non-proportional reinsurance the re insure r assume s a defined tranche
of the risk (exce ss of loss or stop loss).
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Examples
1. Porportional treaty - Quota share
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Examples
2. Non proportional treaty - XL
After application of all proportional reinsurance covers, a direct insurer’s
retention is 8 million. To further protect his retention from major loss, he
then buys a WXL/ R cover of 6 million xs (in excess of) 2 million.
Loss event 1:
A fire leaves the direct insurer with a loss of 1 million for his own account .
Loss event 2:
A major fire leaves the direct insurer with a loss of 7 million for his own account.
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Reinsurance market
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Reinsurance market
Who are the largest reinsurers?
Top reinsurers based on gross premiums written as of the end of the 2011 fiscal year (U.S.
millions):
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Munich Reinsurance Company
Swiss Reinsurance Company Limited
Hannover Rueckversicherung AG
Berkshire Hathaway Inc.
Lloyd’s
SCOR S.E.
Reinsurance Group of America Inc.
China Reinsurance (Group) Corporation
PartnerRe Ltd.
Korean Reinsurance Company
Everest Re Group Ltd.
Transatlantic Holdings, Inc.
MAPFRE RE, Compania de Reaseguros, S.A.
London Reinsurance Group Inc.
Assicurazioni Generali SpA
33,719
28,664
15,664
15,000
13,621
9,845
7,704
6,179
4,621
4,551
4,286
4,035
3,407
3,117
2,674
Source: www.insurancenetworking.com
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Introduction to Swiss Re
Swiss Re is a leading and highly diversified global re/ insurance
company
Source: Swiss Re, Investors presentations
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Swiss Re is broadly diversified by
geography and product line…
Source: Swiss Re, Investors presentations
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…leading to significant capital benefits
Source: Swiss Re, Investors presentations
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Mathematical definitions: VaR and Tail VaR
More precisely…
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Thank you
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modifications or de rivative s of this pre se ntation or to use it for comme rcial
or othe r public purpose s without the prior writte n pe rmission of Swiss Re .
Although all the information use d was take n from re liable source s, Swiss Re
doe s not acce pt any re sponsibility for the accuracy or compre he nsive ne ss of
the details give n. All liability for the accuracy and complete ne ss the re of or
for any damage re sulting from the use of the information containe d in this
pre se ntation is expre ssly exclude d. Unde r no circumstance s shall Swiss Re
or its Group companie s be liable for any financial and/ or conse que ntial loss
re lating to this pre se ntation.
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