Swiss Re Is Dedicated to Underwriting Improvements With Research-Steered Technology Investments

For almost a decade, Swiss Re has been missing its stride. Yet, we think this is a top-quality business with some unique assets. More than any other European reinsurer we cover, Swiss puts research and development, data and technology, customer relationships, analytics, and insight front and center when trying to carve out a pure underwriting-based competitive advantage. It has the leading property-casualty claims ratio by a minimum of 1 percentage point. We think it operates with strong natural catastrophe underwriting skill sets, driven by its proprietary risk models and collaboration with leading scientists. Barriers to entry are high because of potential losses, should a business fail to underwrite properly. A new entrant's entire capital base could easily be wiped out. That entrenches Swiss with customers, enhances trust, and increases switching costs.