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Reassurance Market as Resource for Development in CIS Miroslaw Kowalski LLIF Director Head Moscow Offie, Russia & CIS Life & Health Swiss Re Life&Health Swiss Re 20, 21 June 2007 Slide 1 Agenda Introduction & history Principles & Organization Competitive strengths Facts , figures & Outlook L&H in Central Eastern Europe (CEE) Swiss Re Services Life&Health Swiss Re 20,21 June 2007 Slide 2 Global presence Life&Health Swiss Re 20, 21 June 2007 Slide 3 Offices in more than 30 countries Swiss Re Group at a glance Net income amounted to CHF 1.5 billion Premiums earned amounted to CHF 27.8 billion Total investments amounted to CHF 114.9 billion Leading position in P&C reinsurance Leading L&H reinsurer Leading provider of insurance-linked securitisation solutions Highly diversified portfolio by region and by line of business Life&Health Swiss Re 20, 21May 2007 Slide 4 Proven expertise in risk and capital management Strong corporate culture based on over 142 years of experience Agenda Introduction & history Principles & Organization Competitive strengths Facts , figures & outlook L&H in Central Eastern Europe (CEE) Swiss Re services Life&Health Swiss Re 20,21 June 2007 Slide 5 Competitive strengths Client base Financial strength Knowledge Expertise in capital and risk Comprehensive product and service offering Global presence Balanced portfolio Geographical diversification Global leadership position Life&Health Swiss Re 20, 21 June 2007 Slide 6 Client base Reinsurance Property and casualty insurance companies Life insurance companies Captives Large corporations Financial institutions Institutional investors Life&Health Swiss Re 20, 21 june 2007 Slide 7 Financial services Knowledge and expertise – Swiss Re’s publications Long-established and proven expertise Extensive research and focused innovation Exceptional working and learning environment Life&Health Swiss Re 20, 21 June 2007 Slide 8 Swiss Re’s publications sigma series risk perception series risk dialogue series focus reports www.swissre.com Expertise in capital and risk Risk transfer Single risk Whole company Portfolio of risks Reinsurance underwriting Risk management services Claims Balance-sheet management Life&Health Swiss Re 20, 21 June 2007 Slide 9 Enhance underwriting capacity Optimise use of capital Stabilise after-tax earnings Improve ROE Optimise cash management L&H in Central Eastern Europe (CEE) as an example for CIS Macroeconomic Situation Premium Volume Portfolio Mix Growth Major Players Perspectives Life&Health Swiss Re 20, 21 June 2007 Slide 10 Swiss Re Services Only1% of the European Life Insurance is written in CEE EUR bn 100% Share of CEE in Europe GDP: 12% NL: 8% L: 1% 2006 preliminary figures Russia: Life Insurance without salary scheme business Source: Economic Research & Consulting 90% 1637 33 11831 399 GDP Non-life insurance Western Europe Central & Eastern Europe 11 80% 70% 60% 50% 40% 738 30% 20% 10% 0% Life&Health Swiss Re 20, 21 June 2007 Slide 11 Life insurance 90% of the regional Life Premium Income is generated in Central Europe GDP 2006: EUR 1`637bn Rest of Eastern Europe 21,8% Life Insurance Premium 2006: EUR 11.1 bn Russia 45,2% Rest of Eastern Europe 10,0% CEE 87,3% CEE 33,1% Slide 12 Russia 2,7% Russia: without salary scheme business, preliminary data Sources: WIIW, Insurance Regulator, Insurance Association, Swiss Re Economic Research & Consulting almost 2% of Gross Domestic Product is spent for Life Insurance 7% Life Insurance Premium/GDP (2006), preliminary data 6% 5% 4% 3% 2% Slide 13 Sources: Insurance Regulator, Insurance Association, Swiss Re Economic Research & Consulting Greece Germany EU15 Poland Slovenia Hungary Slovakia Croatia Bulgaria Romania Czech Republic Life&Health Swiss Re 20, 21 June 2007 Ukraine * Russia: Without short term salary scheme business Russia* 0% Kazakhstan 1% …the Share of Risk is accordingly low 6 EUR bn 2006 Data 5 4 3 2 1 * Russia: Without short term salary scheme business Life&Health Swiss Re 20, 21 June 2007 Slide 14 0 Poland Slovakia Czech Republic Savings Component Source: Swiss Re Economic Research & Consulting Hungary Russia Risk Premium Foreign Insurers dominate the Life Insurance Business Market share of Life Insurer with foreign contribution of capital of 50% or higher (2004) Slovenia Ukraine Poland Croatia Romania Czech Republic Hungary Slovakia Life&Health Swiss Re 20, 21 June 2007 Slide 15 0% 20% 40% 60% 80% 100% Sources: Insurance Regulator, Insurance Association, Swiss Re Economic Research & Consulting Strong economic growth expected Ukraine Kazakhstan Slovakia Russia Poland Czech Republic Slovenia Hungary Life&Health Swiss Re 20, 21 June 2007 0% 1% 2% 3% 4% 5% Compound average growth rate (2007-2010) Slide 16 6% 7% 8% 9% Real growth 2006 Sources: WIIW, Oxford Economic Forecasting Ltd, Swiss Re Economic Research & Consulting Wealth will increase – departing from low levels EU-15 average GDP per capita at Purchasing Power Parity 100 90 80 70 60 50 40 30 20 10 Life&Health Swiss Re 20, 21 June 2007 Slide 17 1995 Source: WIIW 2000 2005 2010 2015 Czech Republic Slovakia Poland Russia Bulgaria Romania Ukraine Macedonia 0 Central Europe with two digit Growth Rate Index 1991 = 100 1000 900 15% 800 700 600 11% 500 400 300 200 100 -18% 0 1991 1992 1993 CE Slide 18 1994 1995 1996 1997 1998 1999 Remaining part of Eastern Europe 2000 2001 2002 2003 2004 2005 2006P Russia Sources: Insurance Regulator, Insurance Association, Swiss Re Economic Research & Consulting CAGR 19922006 Strategic challenges Increase insurance penetration Strategic challenges Fast evolving insurance corporate landscape Key issues Insurance risks and risk transfer State support & regulatory compliance Slide 19 Market entry of international companies Competition Consolidation/M&A Development of insurance infrastructure New exposures, higher sums insured eg mortality risk Incentives for private sector solutions Implement best practice regulation Data Agenda Introduction & history Principles & Organization Competitive strengths Facts , figures & Outlook Swiss Re L&H in Central Eastern Europe (CEE) Swiss Re Services Life&Health Swiss Re 20, 21 June 2007 Slide 20 Swiss Re Services Life&Health Swiss Re 20, 21 June 2007 Slide 21 Swiss Re is well-known for services provided to its clients based on needs and combines in-depth global expertise with a local focus, tailored to the individual demands of our clients As most members of our life reinsurance marketing teams are qualified actuaries, our clients are in a position to receive regular on the spot actuarial advice, as well as benefiting from discussions with a wellinformed technically-able partner. Swiss Re Services Design and pricing of innovative and competitive products, conduct experience studies to broaden our experience data basis Underwriting Support to meet our clients’ underwriting needs We provide a tailored underwriting service, including specialist medical knowledge or advice on difficult cases Life&Health Swiss Re 20, 21 June 2007 Slide 22 We also advise on optimizing the costs and benefits of the underwriting process and maintaining adequate risk management protocols Swiss Re Services Life Guide – Swiss Re’s internet-based underwriting manual highly valuable tool for the day-to-day underwriting assessment and decision-making process Produced by Swiss Re’s global team of expert medical doctors, researchers, statisticians and underwriters Life&Health Swiss Re 20, 21 June 2007 Slide 23 Swiss Re Services Magnum – Interactive underwriting Swiss Re has harnessed technology to effectively automate the underwriting process and create one of the world's leading life and health underwriting systems this real-time tool adds value to our clients by bringing lower underwriting costs, faster turnaround and a better service for all parties in the value chain Magnum ensures that the customer can be given a swift decision. Life&Health Swiss Re 20, 21 June 2007 Slide 24 Swiss Re Services Support in Claims Management We offer support of our client's claims management activity, provide valuable input from the claims perspective into product development initiatives . Through seminars and individual company workshops, we are committed to providing professional training and development for our clients, aimed at building a sound knowledge base of best claims practice. Life&Health Swiss Re 20, 21 June 2007 Slide 25 Swiss Re Services Training and Seminars Swiss Re organizes highly professional seminars for its clients. Round table events and seminars on a specific topic or for a specific client satisfying the actual needs of a particular insurance company Swiss Re Academy Life&Health Swiss Re 20, 21 June 2007 Slide 26 We offer a comprehensive training portfolio to continue providing world-class client training Swiss Re Services Publications and News (http://www.swissre.com) There is a wealth of materials available at Swiss Re for the use and benefit of our clients Life&Health Swiss Re 20, 21 June 2007 Slide 27 summarized in our booklet “Swiss Re Publishing” Our regular publications “Sigma” and “Insights” Our worldwide network of specialists, increasingly “networked” for better communication Our web-page (www.swissre.com) Questions? Thank you for your attention www.swissre.com [email protected] Slide 28