Swiss Re is negotiating with Japan's Softbank over its potential tie-up. Meanwhile, the Swiss reinsurer's chairman Walter Kielholz weighs radical changes facing the industry.
«We are assessing several projects with Softbank», Swiss Re’s Kielholz said in an interview with «Neue Zuercher Zeitung» (behind paywall, in German) published on Wednesday. Among the options being weighed are the acquisition of a Swiss Re stake by the Japanese tech company, or a strategic partnership between the two.
Kielholz however is thinking beyond the possible advantages of a tie-up with Softbank, and expects sea changes in the insurance sector, particularly in the field of automobile insurance.
Car Ownership on the Wane
Currently around half Swiss Re’s premium volume is generated by the car insurance business, and this is likely to decline significantly, he warned. While virtually all vehicles are now privately insured this ratio is likely to drop massively in the future as self-drive cars replace privately owned ones in the urban areas. Kielholz predicts a 15 percent drop in new car purchases, with cars being platform-owned in the future.
Swiss Re must «move closer to risk» as presently it is the last link in the chain of service providers. The head of this chain is dominated by digital concerns like Uber, AirBnB or E-commerce platforms like Amazon and Alibaba.And since these companies have access to significant amounts of client data, they would be able also to offer insurance solutions and products, according to Kielholz, who does however see potential for cooperation with digital concerns.
