Swiss Re yesterday revealed it could save up to SFr500 million (€310 million) in capital through a little noticed organisational change announced this week.
The world's biggest reinsurance company said forming three new legal entities in Luxembourg as risk carriers for most of its reinsurance and insurance business in Europe would allow a significant simplification of its legal structure.
The move could herald similar steps by other big insurance groups ahead of regulatory changes in the European Union designed to simplify supervision for companies operating in more than one market and, potentially, allow efficiencies in deploying capital.
XL Capital, a Bermuda-based reinsurer, and Zurich Financial Services, the Swiss-based insurance group, have revealed plans for similar vehicles in Ireland.
"The new legal structure will allow more efficient capital management, administration and reporting," said Henner Alms, a Swiss Re official. "It will improve the alignment of regulatory and economic capital requirements."
The three Luxembourg entities to cover Swiss Re's reinsurance business, and its directly written life and non-life insurance activities respectively, will serve as regulatory focal points once new guidelines take effect.
The new "one passport" system under the EU Reinsurance Directive will mean the group's separate entities elsewhere in the EU will come under the umbrella of the Luxembourg vehicles.
Munich Re, the world's second biggest reinsurer, which has been reported to be considering changing its legal structure to the new Societas Europaea form,denied any immediate plans.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)