Reinsurer Swiss Re is surprisingly in motion. A restructuring comes to a solution that existed before.
The world’s second-largest reinsurer, Swiss Re, has announced a surprise reorganization.
The Zurich-domiciled group spoke Thursday of “streamlining its organizational structure,” but ‘streamlined,’ as the word actually implies, there is little.
One becomes two
Instead, from April 2023, the Swiss Re Group will be split up again in a similar way to the way it was set up back in 2007.
The current Reinsurance business unit will be split into P&C Re and L&H Re, each with full responsibility for the associated underwriting and claims management processes, the competitor of market leader Munich Re announced on Tuesday.
Ex-chief with new unit
Urs Baertschi, currently chief executive officer Reinsurance of the EMEA region, will head P&C Re, he said. Paul Murray, currently CEO Reinsurance of the Asia Pacific region, will be responsible for L&H Re, the statement added.
For Moses Ojeisekhoba, who has been the head of the entire Reinsurance division, a new business unit will be created. He will take over the management of “Global Clients and Solutions”.
In addition, the reinsurer announced a number of reassignments of responsibilities and the elimination of the ‘Regional Presidents’.
Group CEO Christian Mumenthaler, who has been in charge of Swiss Re since 2016, justifies the move by saying that the planned changes underline the responsibilities for performance and bring clear efficiency gains.
Why he has waited so long since taking office is not clear from the communiqué, however, if the adjustments make so much sense.
On slide 17 of the presentation for investors in 2007, there is already talk of a new Group structure, and a distinction is already made between P&C and L&H.
However, the latest reorganization does not change Swiss Re’s financial reporting, the company further announced, and this is where it gets interesting. Companies actually have to report the way they run their businesses, and apparently not much is changing there.
If you look at the logo for Mumenthaler’s “One Swiss Re” strategy, it uses three mountains to symbolize the three business units, Reinsurance, Corporate Solutions and iptiQ.
With the reorganization, Reinsurance, the highest peak, will now be split into two smaller mountains, which should bring the Swiss Re logo to four mountain peaks.
Knowledge of competition
In any case, there is currently a significant shuffling of chairs at the company. Last Thursday, the Group Chief Underwriter (CUO), i.e. the overall person responsible for underwriting the business, had suddenly gone missing.
Thierry Léger had resigned as a member of the Group Executive Committee and as Group CUO of Swiss Re with immediate effect to take over competitor Scor as Group CEO.
The entire knowledge of the processes virtually went with him from Swiss Re to the competitor.
Responsibility across the board
The responsibilities of the group chief underwriting officer will be reassigned at Swiss Re, according to today’s announcement. “Primarily to the CUOs of P&C Re and L&H Re as well as to Group Risk Management,” the communiqué said.
So it’s going from one place in the company now to the breadth of the two new units.
A look at equity
What exactly the streamlining of the organization is all about will become clearer in a good two weeks. That is when Swiss Re will announce its results for the past financial year.
That day is likely to be exciting anyway, because that’s when the level of shareholders’ equity will become visible. Last year, the reinsurer’s equity had shrunk incredibly, mainly due to the rise in interest rates, as muula.ch reported.
Then it’s also worth taking a look at the developments under CEO Mumenthaler since 2016.