Insuring the insurers

THE benefits of reinsurance - protection purchased by insurance companies - are likely to touch almost everyone, including industries, businesses, governments, and consumers. Yet it is a service most individuals are blithely unaware of. Says Walter Kielholz, chairman of Swiss Re's board of directors: "The reinsurance business is strange insofar as no one who walks on the street has any business with a reinsurance company. Nevertheless we cover most risks in some form or other. "We're the largest owner of life insurance risk. We're one of the biggest natural catastrophe insurers. Most people don't even know we exist. If I say at a dinner party that I work at a reinsurance company, everyone falls asleep. But that's good because there isn't so much media attention.''

Mr Kielholz is speaking to BT during a visit early in the year, before news emerged that Japanese billionaire dealmaker Masayoshi Son's SoftBank Group Corp is keen on a stake in the cash-rich reinsurer. Swiss Re has since found itself in the headlines, with reports that it is considering Softbank's overtures, but that any discussions over a minority investment are still at an early stage.

Speaking to BT, Mr Kielholz confesses to a degree of ignorance about the reinsurance business himself when he was looking for a job in the mid-1970s, as he was completing his MBA course in Switzerland. "If someone told me I'd go into insurance, I'd probably beat him up,'' he quips. "I had no clue what reinsurers do. I just tried it out; it was interesting. I realised this was a very international business, a very intellectual business.'' The 67-year old Swiss began his career with General Reinsurance Corporation in Zurich in 1976, holding positions in the US, UK and Italy, among others. He briefly joined Credit Suisse in 1986, and then Swiss Re in 1989. He was Swiss Re chief executive between 1997 and 2002.