Last week, Swiss Re Corporate Solutions unveiled a new organisational structure in a bid to serve corporates and brokers where they are at country level. Effective June 1, the new structure consists of nine market units, each led by a market unit head operating on the ground of the region.
Discussing the changes, Ivan Gonzalez (pictured), CEO of Swiss Re Corporate Solutions, noted that after almost 40 years of operating in the commercial insurance space, the business has developed a keen understanding of the machinations of the market. The role of the risk manager in the large corporate space has evolved significantly, he said, from just being responsible for negotiating the price and terms of an insurance contract, to taking true ownership of helping a corporate navigate an ever-more complex risk environment.
Risk managers are increasingly expected to provide guidance on how corporates can mitigate some of the risks they face and on the types of insurance required to do that, he said. It’s no longer necessarily just a question of cost. It’s against that backdrop that Swiss Re Corporate Solutions is rolling out this new organisational structure because the business recognises the pressing need to be close to clients and brokers in order to maintain its relevance to them.
As to what this means for brokers, Gonzalez highlighted how the commercial insurance space is composed of 40 to 50 companies competing across different geographies. It’s a positive state of affairs for customers and brokers, he said, because there’s plenty of competition. “Ultimately the job of the broker is to find the highest amount of capacity available at the lowest possible price. And this construct helps them be able to do that, particularly in the more commoditised parts of the market where there's not that much differentiation other than price and capacity.”
For brokers focusing on very commoditised business, Swiss Re Corporate Solutions does not always expect to be the right partner. “What we recognise is that in the context of the changing risk landscape, brokers are being faced with demands and questions from their clients that are about very complex topics.” In this context, the pressing conversation for brokers is no longer mainly around price and capacity, but in first understanding their clients' risks and needs.
Swiss Re Corporate Solutions' new setup looks to bring welcome clarity to brokers, he said, in recognition that these are very busy people who don’t have the time to be fielding endless calls before putting together a deal. They need clarity and security in as short a time as possible so that they can get the support they need for their clients – and that means their insurance partner needs to be both close to them and responsive.
The organisational changes were announced the same day as Swiss Re Corporate Solutions delivered a net income of US$829 million and a combined ratio of 89.7%. This was no coincidence, Gonzalez said, as the firm was looking to send a message to its clients, brokers and business partners that despite a very strong financial year, it has no intention of resting on its laurels.
“We recognise that we always need to look forward to meet our clients' evolving requirements,” he said. “While we're running a global business, some markets are bigger, or may have more complexities than others. We therefore felt that a ‘one-size-fits-all’ approach was not appropriate in the longer term. We simply need to be much closer to our clients in order to address their specific needs and demands.”
There’s a clear vision underpinning the strategy behind the rollout of the nine market units, he said, and it’s driven by the ambition to be the specialised risk partners of choice for clients globally. It’s about being a company that brokers and corporates know they can rely on for expertise and specialism, but it’s also about the power of differentiation – which is best delivered at a market unit level.
“There are two particular areas where I feel differentiation is absolutely key for us,” Gonzalez said. “One is what we call International Programs, which is our proprietary platform to support multinational companies with insurance needs around the world. This is a US$60 billion market where you have five to 10 companies competing rather than 40 to 50 because it’s a highly specialised segment that requires expert servicing all over the globe.
“[…]The other key area for us is alternative risk transfer, where the market has developed significantly over the last few years around parametric solutions, captive solutions, cat bonds etc. Since the beginning, Swiss Re has been a pioneer in this space, which gives us a strong competitive advantage. The last few years have brought many companies to rethink some of their traditional insurance placements and come to the alternative space to find the right solutions for their needs.”
The strategic ambition of Swiss Re Corporate Solutions is for each of the nine market units to deliver these differentiated solutions to their clients, he said. Over the course of the next few months, the internal changes will come together, but in the meantime, clients and brokers can expect full business continuity and responsiveness as, “the business is done at a country level – our people are in the country, the clients are in the country and the brokers are in the country.”
