Swiss Re announces a strategic alliance with Microsoft

  • Swiss Re to create a Digital Market Center using Microsoft’s data analytics and artificial intelligence capabilities to transform how risks are predicted, managed and insured
  • Microsoft to support Swiss Re in developing go-to-market strategies for new risk management solutions and insurance products based on data insights
  • The Digital Market Center’s initial focus will be on connected vehicles and mobility, Industry 4.0 and natural catastrophe resilience

Zurich, Switzerland (Mar. 12, 2020) – Swiss Re and Microsoft Corp. have announced a strategic alliance to further advance insurance innovation and extend financial protection to more people globally. The centrepiece of the strategic alliance is the launch of Swiss Re’s Digital Market Center, which will help develop next-generation, large-scale tools to transform the way the insurance industry predicts and manages risks, as well as how the industry creates tangible products based on Swiss Re’s risk knowledge.

Swiss Re’s new Digital Market Center will draw on Microsoft’s next-generation Azure cloud technologies, internet of things and artificial intelligence capabilities. The first areas of application are planned to be connected vehicles and mobility, industrial manufacturing (”Industry 4.0”), and natural catastrophe resilience. The Digital Market Center will also develop innovative cyber platforms to measure business risks in a digital environment, enabling a new class of risk technology solutions.

Swiss Re’s Digital Market Center will offer insurers a broader understanding of risks and their ripple effects on society, governments and economies. For example, powered by Microsoft’s automotive data capabilities, Swiss Re will be able to develop a much deeper analysis of automotive risks such as a car’s safety performance when using the latest driving assistance technologies. By providing data-driven insights from this type of data, Swiss Re can enable insurers to design innovative new motor insurance products, such as pay-as-you-drive covers.

Swiss Re’s work in this area will go beyond new product creation and provide broader risk insights for complex, interconnected systems. For example, risk managers can get a greater understanding of how the loss of a ship’s cargo may impact global supply chains, or how natural catastrophes will impact a government’s key infrastructure investments. Based on these type of data insights, insurers can develop solutions that proactively mitigate losses before they occur.

As part of the strategic alliance, Swiss Re will transform its internal operating platform by modernising and moving it to the Azure cloud. This move will increase the efficiency and effectiveness of the core processes by leveraging the most advanced data processing and AI capabilities at scale.

Thierry Léger, CEO Swiss Re Life Capital, said: “Swiss Re’s alliance with Microsoft will help accelerate the digital transformation of the insurance industry, with benefits across all lines of business. By building digital markets and not just isolated products, we aim to transform the way businesses approach the risks they face. The alliance between Swiss Re and Microsoft presents an exciting opportunity for the insurance industry.”

Anette Bronder, Swiss Re Group Chief Operating Officer, said: “Digital transformation can only be achieved through strong partnerships. The strategic alliance with Microsoft will greatly advance our ability to make our risk expertise available to our clients. At the same time, we can achieve significant efficiency gains for our own internal platforms and processes. This is an important step for Swiss Re’s evolution as a leading data-enabled risk knowledge company.“

Jean-Philippe Courtois, Executive Vice President and President, Microsoft Global Sales, Marketing and Operations at Microsoft, added: “I am looking forward to seeing how this collaboration enables new pathways for innovation in how insurance solutions are built and managed. By combining Swiss Re’s risk expertise with Microsoft Azure, we have the opportunity to deliver greater peace of mind to people and to enrich their experience with the insurance industry.”

Revised oil and gas policy

In 2018, Swiss Re implemented a thermal coal policy as a first step towards a comprehensive carbon steering mechanism. The coal policy is part of its Sustainability Risk Framework established already in 2009. Swiss Re has now also revised the oil and gas policy in the same framework with the aim to reduce Swiss Re’s carbon exposure by stopping support for production of oil and gas that exceeds a defined lifecycle carbon intensity threshold.[1] As a result of this new policy, Swiss Re will gradually cut business support in underwriting and asset management to the world’s 10% most carbon-intensive oil and gas production by 2023. Swiss Re will continue to work with and support the transition of those producers who do not fall under these exclusions.

Further measures to reduce carbon intensity of investment portfolio

As a member of the UN-convened Net-Zero Asset Owner Alliance, Swiss Re has committed to transition its investment portfolio to net-zero greenhouse gas emissions by 2050.

Swiss Re was one of the first in the industry to switch to ESG benchmarks in 2017. Swiss Re divested from companies with an exposure of more than 30% to thermal coal in 2016 and in 2019 added absolute thresholds[2] for mining companies and power utility generators. Through these measures, Swiss Re has achieved a 50% average carbon intensity reduction in its investment portfolio across credits and listed equities since the end of 2015.

As a further measure, Swiss Re has increased its green, social and sustainable bond target from USD 1.5 billion to at least USD 4 billion by 2024.

Commitment to net-zero emissions from own operations by 2030

For its own operations, Swiss Re has committed to reaching net-zero emissions by 2030.

Swiss Re has already been focusing on its own CO2 emissions and energy consumption for many years and launched its Greenhouse Neutral Programme in 2003 combining the commitment to reduce its CO2 emissions per employee with offsetting all remaining emissions by purchasing high-quality emission reduction credits.

To reach the target of net-zero emissions by 2030, Swiss Re will further increase its efforts to cut emissions, with a particular focus on business travel. In addition, for every tonne of CO2 that cannot yet be avoided, another tonne will be removed from the atmosphere and stored permanently. To pay for this new way to compensate emissions, Swiss Re will ramp up its internal carbon levy. A stringent price on carbon will incentivise emission reductions, for example through less travel by air.

Notes

1. Lifecycle carbon intensity as measured by kilograms of carbon dioxide per barrel of oil equivalent. By 2023, no support will be provided for the 10% most carbon-intensive production.

2. Mining companies producing at least 20 million tonnes of coal per year and power utility generators with more than 10 GW installed coal fire capacity.

About Swiss Re

The Swiss Re Group is one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk – from natural catastrophes to climate change, from ageing populations to cybercrime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally. It is organised into three Business Units, each with a distinct strategy and set of objectives contributing to the Group’s overall mission. For more information, please visit www.swissre.com.

About Microsoft

Microsoft (Nasdaq: MSFT) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more. For more information, visit www.microsoft.com.

Forward-Looking Statements

Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets, and trends) and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact.

Forward-looking statements typically are identified by words or phrases such as “anticipate”, “assume”, “believe”, “continue”, “estimate”, “expect”, “foresee”, “intend”, “may increase”, “may fluctuate” and similar expressions, or by future or conditional verbs such as “will”, “should”, “would” and “could”. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the Group’s actual results of operations, financial condition, solvency ratios, capital or liquidity positions or prospects to be materially different from any future results of operations, financial condition, solvency ratios, capital or liquidity positions or prospects expressed or implied by such statements or cause Swiss Re to not achieve its published targets.

Such factors include, among others: the frequency, severity and development of insured claim events, particularly natural catastrophes, man-made disasters, pandemics, acts of terrorism and acts of war; mortality, morbidity and longevity experience; the cyclicality of the insurance and reinsurance sectors; instability affecting the global financial system; deterioration in global economic conditions; the effect of market conditions, including the global equity and credit markets, and the level and volatility of equity prices, interest rates, credit spreads, currency values and other market indices, on the Group’s investment assets; changes in the Group’s investment result as a result of changes in the Group’s investment policy or the changed composition of the Group’s investment assets, and the impact of the timing of any such changes relative to changes in market conditions; the Group’s ability to maintain sufficient liquidity and access to capital markets, including sufficient liquidity to cover potential recapture of reinsurance agreements, early calls of debt or debt-like arrangements and collateral calls due to actual or perceived deterioration of the Group’s financial strength or otherwise; any inability to realise amounts on sales of securities on the Group’s balance sheet equivalent to their values recorded for accounting purposes; changes in legislation and regulation, and the interpretations thereof by regulators and courts, affecting us or the Group’s ceding companies, including as a result of shifts away from multilateral approaches to regulation of global operations; the outcome of tax audits, the ability to realise tax loss carryforwards, the ability to realise deferred tax assets (including by reason of the mix of earnings in a jurisdiction or deemed change of control), which could negatively impact future earnings, and the overall impact of changes in tax regimes on business models; failure of the Group’s hedging arrangements to be effective; the lowering or loss of one of the financial strength or other ratings of one or more Swiss Re companies, and developments adversely affecting the Group’s ability to achieve improved ratings; uncertainties in estimating reserves; policy renewal and lapse rates; uncertainties in estimating future claims for purposes of financial reporting, particularly with respect to large natural catastrophes and certain large man-made losses, as significant uncertainties may be involved in estimating losses from such events and preliminary estimates may be subject to change as new information becomes available; extraordinary events affecting the Group’s clients and other counterparties, such as bankruptcies, liquidations and other credit-related events; legal actions or regulatory investigations or actions, including those in respect of industry requirements or business conduct rules of general applicability; changes in accounting standards; significant investments, acquisitions or dispositions, and any delays, unexpected costs, lower-than expected benefits, or other issues experienced in connection with any such transactions; changing levels of competition, including from new entrants into the market; and operational factors, including the efficacy of risk management and other internal procedures in managing the foregoing risks and the ability to manage cybersecurity risks.

These factors are not exhaustive. The Group operates in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

This communication is not intended to be a recommendation to buy, sell or hold securities and does not constitute an offer for the sale of, or the solicitation of an offer to buy, securities in any jurisdiction, including the United States. Any such offer will only be made by means of a prospectus or offering memorandum, and in compliance with applicable securities laws.

SOURCE: Swiss Re

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