The CEO of Agnelli Holding, John Elkann, has strongly criticized the insurance industry. The chairman of reinsurer Swiss Re, Sergio Ermotti, immediately countered that criticism on muula.ch.
John Elkann, the head of Exor – the family holding company owned by the Italian Agnelli family clan, went out on a limb on Tuesday evening during a lecture at the Swiss Institute for Foreign Studies at the University of Zurich, and strongly criticized the insurance industry.
The level of innovation shown by insurers and reinsurers leaves a lot to be desired, the top manager explained in the auditorium of the University of Zurich. His holding company sees much more innovation in the healthcare sector, for example, or in the development of a completely new Ferrari that does not just have an electric drive, he continued.
Computing power needed
Insurtech, i.e. innovations as well as modern technologies in the insurance sector, has actually also led to nothing, Elkann told the assembled Swiss financial community, which included financial doyen Walter B. Kielholz or the Chairman of the reinsurer Swiss Re, Sergio Ermotti, for example.
Nevertheless, the heads of companies such as Stellantis as well as chairman of Fiat Chrysler Automobiles went on to say that truly revolutionary technologies, the use of artificial intelligence (AI) as well as a great deal of computing power to process the enormous amounts of data are needed to further develop the insurance industry.
Cycles and dividends
Exor Holding did not see any of this with its stake in reinsurer Partner Re, he said, which is why it recently sold that investment. “There are just bigger companies needed in the market,” Elkann said in this regard.
It is true that other circumstances, such as the major cycles in the reinsurance business, the uncertain impact of climate change, the lack of dividend payments in the event of hurricane events and the fact that a suitable buyer was just around the corner, would have led to the sale of the Partner Re activities.
However, the limited size and non-scalability of the business would have ultimately tipped the scales in favor of ditching the Agnellis’ reinsurance business.
However, Ermotti, the Chairman of the Board of Directors of the second largest reinsurer in the world, Swiss Re, did not want to let all the criticism sit on his hands on Tuesday evening. Asked by business news portal muula.ch about Elkann’s statements and the business outlook for the insurance industry, the former UBS Group CEO Ermotti immediately countered all the criticism.
The challenges in the reinsurance industry are certainly there, said Ermotti, who was visibly full of energy. However, he did not view the business of insurers and reinsurers as negatively as Elkann, emphasized the Chairman of Swiss Re.
And he was not worried about scaling the business either. “We at Swiss Re have the necessary size,” Ermotti exulted in response to the Exor holding company CEO’s presentation.
But Elkann must now say all of this about the insurance industry, Ermotti continued. After all, Agnelli Holding had withdrawn from the insurance business, the top Swiss Re executive further impressed to muula.ch.