Tuesday, December 16, 2008

Swiss Re: "Maybe trading is not our core business"

More likely this comes as some sort of a concession to regulatory agencies in exchange for government capital infusions.

Swiss Re outsources some trading, drops life ILS

LONDON, Dec 15 (Reuters) - Swiss Re (RUKN.VX: Quote, Profile, Research, Stock Buzz) is to outsource trading of equities and alternative investments and cease structuring life insurance linked securities for clients, the world's second-largest reinsurer said on Monday.

The moves are part of a continuing reorganisation of Swiss Re's financial markets unit, which creates products to transfer insurance risks to capital markets and manages assets generated by the company's (re)insurance activities.

A new Investment Platform Division within the financial markets unit will manage external mandates in equities and alternative investments. Management of assets used to match the firm's (re)insurance liabilities, including rates, credit and securitised products, will be kept in-house.

Dan Ozizmir will continue to head up insurance-linked securities (ILS) activities, which will be focused on natural catastrophe and weather risk. Swiss Re will no longer structure life securitisations for clients.

"We are very supportive of the life ILS market and will also continue to be an active issuer of life ILS when we think the pricing is attractive to us," a spokesman for the company said.

"We have built up strong skills and talent in the life ILS team which will redeploy to support the transfer of Swiss Re's own life risks to the financial markets. But we have stopped issuing life ILS deals for third parties in their current form."

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