Swiss Re CEO: The Business of Reinsurance, Climate Impact and Risk Prevention

0:01Nicolai Tangen: Hi everybody and welcome to In Good Company. I'm Nicolai Tangen, the CEO of the Norwegian Sovereign Wealth Fund. And today we are in really good company. We are here with Andreas Berger, who is the CEO of Swiss Re. Now, Swiss Re is a very interesting company. They basically insure insurance companies. We own 1.6 % of the company or 800 million US dollars. Warm welcome, Andreas.

0:25Andreas Berger: Thank you very much. Thanks for having me.

0:35Nicolai Tangen: So let's start with the simplest thing here. What does a reinsurance company do?

0:41Andreas Berger: Well, you already said it. We are the insurers of the insurance companies. Some refer to it as the central bank of the insurance industry. Technically not 100 % correct. So we are giving financial protection to insurance companies. So why do insurance companies need to insure themselves? Insurance companies sit in a national or maybe also international context, but they need to protect the balance sheet. And they benefit from our diversification that happens at global level. So we've got global diversification because risks are not correlated. But if you look at a standalone basis, then obviously the insurance companies need more capital for this.

1:22Andreas Berger: So diversification helps.

1:24Nicolai Tangen: Do you have to have a special kind of psyche to work with only risks and potential negative outcomes?

1:32Andreas Berger: No, but I think the purpose, in particular also re-insurance, our purpose is we make the world more resilient. That resonates for people, in particular for me who grew up in so many parts of the world, and I saw risks firsthand, coup d 'etats, revolutions, other kinds of risks. And I started to think, what does that do? What does that do to people? What impact does it have? When you switch on the TV, everything that happens, how do societies deal with this? So I developed an interest in all of this.

2:09Nicolai Tangen: Andreas, can we talk about the different types of risks that you insure? How do you split it?

2:13Andreas Berger: Yeah, we focused on three business units. One is life and health reinsurance. So our insurance companies, life and health insurance companies, our clients. Property and casualty reinsurance company. That's where the insurance companies sell property casualty, homeowners insurance, motor insurance, et cetera. Then we have a third unit that's called corporate solutions. There we insure corporates, large corporates, who also have their own insurance companies, captives. So these are the three units. And they have a very nice diversification benefit for the group. Life insurance is not correlated to PNC reinsurance.

2:51Andreas Berger: And within PNC reinsurance, the two units are not directly correlated because corporate solutions reinsures externally. I'll give you an example. Natural catastrophes. The capital return on a standalone basis for natural catastrophes is 8%. If you look at it at group level, it increases to 40%. So that's the diversification benefit that I'm talking about.

3:15Nicolai Tangen: Let's start with natural catastrophes because we read about them in the paper every day. So, what are the main catastrophes that you injure against?

3:25Andreas Berger: We call it primary and secondary perils. Primary perils are earthquakes, for instance, hurricanes. Secondary perils are more the frequency perils, floods, wildfires, you know, the likes. Those are secondary perils. In the last six years, consecutive years, the losses, the insured losses, exceeded 100 billion. So that's about an increase of 5 to 7 % per year. So we see really that the frequency increases, but also the severity. I think that's something to address. In 2024, for instance, we had economic losses. Those are all losses, not only the insured economic losses of 318 billion. And 137 billion were insured.

4:14Andreas Berger: Why do we have more and more natural catastrophes? people refer always to climate that's one aspect that complicates things but the main aspect is population growth population growth and with the population growth comes increased assets cars houses etc and unfortunately always in the nicest areas and some of the nicest areas are

4:35Nicolai Tangen: very very much natural catastrophe areas so that is the main reason if you split the two and we do climate first and then we do what the population growth so what is the climate impact you think on catastrophes so the primary reason is really population growth i must say that because climate

5:00Andreas Berger: impact we always had that so that's one thing to think about but the climate aspect is actually adding to it and you can see it in water sea level rising or temperature rising so what we do is we project into the future. We've got a data platform where you can create basically a digital twin of, for instance, an air corporate company. And their assets, we stress test them with all the events, hurricanes, et cetera. And then we also do projections according to temperature advisors. We use scientific models. And that informs basically, gives you insight, informs the severity or the resilience management in corporates, but insurance companies, but also in public entities.

5:43Andreas Berger: Those are the three customer groups that we service.

5:46Nicolai Tangen: I listened to some of your podcast and in your firm, you talk about severe convection storms. The way I understand it, these convection storms are difficult to predict because they are very fast, right? And localized.

5:59Andreas Berger: Yes, they're difficult to predict, but with our data platform and with the models that we then use, with the projections, we can anticipate some of it, yes. But if not, there's always a way to mitigate and to prevent actions to mitigate, for instance, for floods, to build dikes, etc. You can see that, you know,$1 you spend on the mitigation saves you$10 for rebuilding after the event. So that's a critical aspect in our business as well, not just to risk transfer to insure and reinsure, but also to help people prevent and mitigate.

6:38Nicolai Tangen: What about things like wildfires?

6:40Andreas Berger: Same story. Wildfires, in particular in California, it's a known fact. It's a known fact. So again, here you saw population growth in exactly those exposed areas. And there's a lot that can be done to mitigate, maybe even prevent land use, building codes, right use of building materials. and you could see in the pictures also for the wildfires that happened in California in 2025 in January you could see literally everything that burned down and then there were some houses that were not really impacted so that is down to thinking about how do I build in order to mitigate something that I already know can happen so it's not an unforeseen event

7:32Nicolai Tangen: when we look at the data and we look at the global warming and and so on i'm a bit surprised you are not emphasizing more uh deterioration in in the climate situation no i think swissery was

7:45Andreas Berger: very vocal about this but what i thought would be best to do now is to get from this meta level the macro level i would call always call it from morality to materiality yeah to translate what we know from science into real life that's why we need data we need to connect basically the scientific findings with real life data from private households public entities like municipalities but also for corporates and combine both okay so we have uh floods we got

8:19Nicolai Tangen: fires we got storms so that's kind of the the events but then also more people want to live where these kind of things are happening. So more people in Texas, we've got more solar panels on our roofs, all these kind of things happening, right? So how big is that effect?

8:35Andreas Berger: No, I think the debate is now going really into concrete levels, in particular at state level, because it is a state problem and not really a federal problem. The federal level can help, but what we do also with state levels, Texas is a very good example, we create exactly this data transparency. We ask them, give us your data, your assets. We do this also in Australia, for instance. In New Zealand, concrete levels of municipalities where we say, let's gather the assets, data, put them really as a digital twin on their platform, and then let's see what happens in Texas. heat waves, drought, floods, heavy precipitation, etc.

9:28Andreas Berger: You could really nail it down to a very singular level because it is the lat long that we address. We just need the address, add a bit of information and then the digital twin is complete. That's another complicated thing and the data is very often not really readily available so we try to help people to

9:50Nicolai Tangen: organize data also in a more effective way. What are the kind of things that you cannot insure anymore because of weather related risks? I'm thinking about you know housing in California and other places because of flood and so on just what how does this work?

10:05Andreas Berger: It's not an insurability problem it's actually more than an affordability problem if we don't take care of loss prevention. I think that's the important thing. We need to not only provide a balance sheet for risk transfer, where people benefit from our diversification, but also we need to help people make use of our data, data analytics. We collected data for now 162 years. We're a data company. And now with modern technology where we build data models, et cetera, we can make our models, natural catastrophe models, readily available. and then give insights how to prevent, how to reduce actually the levels of threat.

10:46Andreas Berger: That increases resilience. It's before you even think about insurance. So we need to refocus on the concept of ownership of risk. You cannot shift the burden when you build a house somewhere. That's your house. So you need to be informed about the geological situation, what can happen in this area. And this information is available. So that is our approach to say understanding, awareness creation, plus quantification. Step one. Step two is actually mitigation prevention. And step three is then risk financing. One way is actually risk transfer, insurance or reinsurance then. Do you think we'll see more cases where the government actually needs to own the risk?

11:33Andreas Berger: Yeah, in some areas, the problem is too big to be solved by one party. That's why we promote these public-private partnership models. And what are examples of this? Examples are actually in areas where we say land use needs to be reassessed. Should people move into certain areas where it's almost predictable that catastrophes will happen? And there are good examples where New Zealand, for instance, has decided to relocate people, communities. That's a tough decision. But if you have the data and a common understanding, that's a good way to address it. We have in the UK public-private partnerships to address basically the flood problem.

12:20So the communities come together, the public entities come together, and the insurance sector come together.

12:27Andreas Berger: There are investments into dikes, et cetera. and then we can provide you know capacity otherwise insurance would be not affordable anymore

12:38Nicolai Tangen: are there many places where you think well you know what we got enough risk here we don't want to take on more risk like new york how much risk would a company like yours have in new york if you add up all the real estate all the kind of things you have there no i think we have a capacity

12:54Andreas Berger: allocation model. First of all, we allocate capital. And then the next level is obviously in our chief underwriting committee, we allocate the capacity to the different types of products or risks, lines of business as we call them. And obviously, we need to see that we're not overexposed. We do accumulation controls. And obviously, that informs the level of capacity that we deploy to individual risks. And then we deploy actually budgets to certain territories. but also to certain lines of businesses then.

13:32Andreas Berger: So that was the PNC, but you also have other parts of the business. Yes, we've got the PNC reinsurance business, then obviously the corporate business. That's the second part. And then the third part is the life and health reinsurance business. I think maybe let's talk about the corporate business first.

13:47Nicolai Tangen: Because you were running that before.

13:49Andreas Berger: I was running that before. That is basically...

13:51Nicolai Tangen: And that had some problems in the past, which you came in and faced.

13:55Andreas Berger: Yes, because equally like the PNC re-insurance business, it's also a volatile business. And again, you need to see what diversification do you have in your portfolio? Which risks do you onboard, take on your balance sheet? And how do you want to grow in this type of business? So what kind of risks do you have in that part of the business? We insure basically the full range. We insure corporates for their assets, for their liabilities, for transportation, also the aviation risks. And sometimes we share it also with the reinsurance unit. So corporates, large corporates and upper middle market corporates are our customer base.

14:38Andreas Berger: We're not in the retail business. So we are typically a B2B, business to business business, where you have professional buying centers working together. So we provide also structured solutions, risk financing solutions for captive insurance companies that are owned by corporates. And here again, our data models are being used and our capacity are being used. And we provide worldwide cover for international insurance programs, we call them, you know, where corporates steer their risk globally for all assets in the world centrally. And they need a partner who can actually respond to the needs on the service side.

15:16Andreas Berger: but also help to structure it. It's a complex business. And what was the problem here in the past? The problem was that we had outsized positions in certain type of areas, for instance, in US liability. And the large corporate risk space in the US liability was very exposed to a lot of losses. And that is something where we were overexposed. More than 50 % of our business was in the US. and 90 % of all liability business was also in the US. So we had a concentration there and that was hurting us. And so then they brought you in to fix it and what did you do? We basically reset this business unit.

16:00Andreas Berger: We said, what are we talking about? Who is actually the customer and what do they actually need from us? Where do we have differentiating assets that we can deploy to the customer where the customer also values Swiss Re assets? So risk insights. leading programs, lead capabilities. You need to have the right risk engineers, the right underwriters who can do that, and also the right claims handlers who can do that. And today, we have a very clear proposition. We're not everything to everyone. We focus on a specific customer segment. We have reduced the long-tail business and have now a very healthy book of non-correlated lines of businesses.

16:42Andreas Berger: When the property cycles go down, we definitely have credit and charity that was counter cyclical that helped us actually produce our results but also if you look at the customer feedback they value what Swiss Re stands for on the reinsurance side equally also on the corporate side we're one of the few late entrances in a small group of insurance companies it's the international insurance program space but it's also alternative risk transfer, where you look at finding alternative risk financing structures for corporates, complex structures. Not everybody can do that. So if you look at numbers, in this space, you probably deal with eight to 10 competitors in the international program space.

17:30Andreas Berger: And then if you go into normal placement, there you deal with hundreds or more competitors. So that differentiation helped us to manage basically also the outcome.

17:46Nicolai Tangen: Your last part is the life side. How does the new types of anti-obesity drugs impact this division?

17:56Andreas Berger: Yeah, so we have the leading life and health reinsurance company in the world, and we have something that's called LifeGuide. there we collect all the information that we make available to underwriters for primary insurance companies about certain type of diseases it's almost like a medical handbook with ai we add ai basically and we augment the offering on this lifeguard side so obesity and all the specific aspects of it obviously are entered into our model and into our assumptions obviously and we had this debate around COVID you know what was the reason the causality for these spikes spikes that we could see after the core event of COVID yeah so the late reporting of claims.

18:52Andreas Berger: And we had in, I think it was in 2023, in Q3, if I remember correctly, we had a spike coming through from the US. And we were scratching our heads and we said, why is this happening in the US, in particular in the age group of middle-aged people? Because in all OECD countries, you didn't see that spike. And that causality needed to be understood. People asked, is this obesity? Is this use of drugs? Is this cancer? Because interestingly, it went through all social groups. So there's a lot of research that's happening there. Not all answers have been found. But I think that's something really when we need to dig very deep, because we're exposing our balance sheet, and we need to put the expectations into our costing and to our pricing ultimately also.

19:46Andreas Berger: And if you don't get it right, you expose yourself for a time period of 30, 40, sometimes 50 years. That's the duration of those contracts. That's why that granularity of understanding is very important.

19:58Nicolai Tangen: What are some of the new issues that you need to think about in terms of whether you can insure them or not?

20:06Andreas Berger: So how does insurance work? You need data. You need data and you need to start to model. You need to understand the data. Let's take one risk where cyber, as an example. It is a common event. But if you go out and ask people, tell me what your worst case scenario is, then you get a lot of answers. Also, the deep understanding of the cyber exposures is not good enough yet.

20:37Nicolai Tangen: Can we fully insure against cyber? I mean, could we with our sovereign wealth fund come to an insurance company and totally insure against cyber so that if somebody stole our money we would get it back from you yeah it's really it starts

20:50Andreas Berger: with the understanding of the exposure yeah and that is something that we have to work together and that's the most critical piece and why don't you get so many so high limits because insurance companies are reducing their exposure by offering smaller limits because we don't know actually what the worst case scenario actually could look like.

21:11Nicolai Tangen: So you cap your exposures for each case? Absolutely.

21:16Andreas Berger: And we have capacity limits and we have risk limits in our company also. And that's very important to measure these.

21:24Nicolai Tangen: What about AI? So we make some AI models in, you make some AI models in a firm. It goes totally ballistically wrong. Big losses. How can you ensure that? Yeah.

21:35Andreas Berger: So that's a new area. And I've been talking about this for quite some time, even before the big hype of AI. Because what's happening? People work with data. And data has biases, too. And then the algorithms come in. And by the way, software programs have the same, you know. So the malfunction of algorithms or software programs is a topic that we need to really get a better understanding for. In our company, the AI governance and the framework for the digital use of data in business is strongly regulated. So we always have the human in the loop. We don't allow AI to take decisions for the humans.

22:23Andreas Berger: And we have this dilemma, and managers have this dilemma. There's this excitement, but then there's also the risk.

22:30Nicolai Tangen: My understanding is that you have two levers to move when it comes to pricing. You got the pricing, right? So prices up by 3%, 5%, 7%. But you also have the exclusion element, right? So you can cap your exposures and you can just exclude things from what you cover. Tell us about this exclusion thing and how that works.

22:51Andreas Berger: Well, usually when you have an exposure in AI, for instance, or algorithm malfunction, etc., it can span across various types of covers that are existing today. And cyber started that way because you had a typical property insurance cover or something that we call non-damage business interruption because property covers usually were triggered when there was a fire or explosion. But the non-damage physical damage exposure, I think that was new. And through this, the cyber exposures were creeping into traditional covers. And that's something that was not intended when the cover or the contract was established.

23:39And that's why as it grew as an exposure, the industry more and more came to the conclusion we need to actually exclude it, understand it.

23:48Andreas Berger: And then as we understand it and have a grip around it, then we need to have a separate cover for this. So you can buy now separate cyber cover instead of integrating it into a property or non-damage business interruption cover.

24:05Nicolai Tangen: But these things are becoming more and more complicated, right? And so what we see, I read in the paper recently, is that more and more of these settlements are ending up in court. How do you see that development?

24:17Andreas Berger: I can't confirm that we have many, many more verdicts. But there are disputes, yes, because there's a dispute around what was the intent when the contract was created. And then what's the exposure, you know, the new exposure, the emerging exposures. Are they included or are they not included? I think that's the typical debate that you have. But that's normal in particular in the B2B world. It's normal. When it comes to households, to private customers, personal alliance businesses, their clarity of cover is very important because it's a consumer protection aspect. With companies that negotiate with reinsurance companies or insurance companies, there you have two professional buying centers.

25:05Andreas Berger: Both are pretty sophisticated. And there it comes down to also contract certainty. is very important and that's why not only the price is important but actually as you said the terms and conditions so we talk we talk now about your three areas and how they and they kind

25:26Nicolai Tangen: of cancel out each other to a certain extent so not you know it's a pretty kind of potentially stable results from you now the way i the way i understand uh this business uh and the cyclicality of the business is that you have some years with big losses. Yes. Afterwards, prices go up. And when prices go up, it's really profitable. So then you get more capital coming in, competing prices down back again. How do these cycles work?

25:54Andreas Berger: First of all, there's not only one cycle. Yeah. Very important to note. Each product, each line of business, as we call it, has a different cycle. So when a cycle, a rate environment is declining in property or natural catastrophe insurance, there are other lines of business that are not correlated to that. And I think that's what we observe. We look at our total portfolio and we call it the target liability portfolio. We have a five-year forward-looking view, and we assume developments, rate developments, but also inflation, et cetera. That all comes in, and then we see, how does my portfolio behave?

26:36And if there's one cycle that goes down, I probably will not grow in that area so much anymore.

26:43Andreas Berger: So I limit capacity deployment to that area. And then I have focused growth ambitions in other areas that are not correlated with that, are not going down. And that's the cycle management. And it's important to understand the behaviors of players in each part of the cycle that a line of business is in. Who are the big players in reinsurance? We have the top three lead reinsurers, we always call them. You could say the top five. The top five have something around 46 % of the market share. The top three have something. So it's Munich Re, it's you. Munich Re, Hannover Re and us. Then there's SCORE as a next one.

27:27Andreas Berger: And then you have also the second tier ones as we call them. So 31 % roughly the top three, 46 % top five. And the top 10 have roughly 70 % of the market share. So the top tier one are the lead reinsurers. Prime insurance companies need lead reinsurers for long-term stability, strong balance sheet, highly rated balance sheets, and long-term commitment. And also those are able to offer whole account views. Then you go into the next second level ones. You find a lot of Bermudans in there. And then you have the third tier. Oh, companies which are situated in Bermuda. They are situated in Bermuda.

28:14Andreas Berger: And it was a growing segment, the tier two segment. And then you've got smaller companies, reinsurance companies, very often departments of prime insurance companies who opened up a reinsurance company. Those are sometimes the tier three ones, yes.

28:31Nicolai Tangen: So let's say now after this meeting, I come out and feel really inspired and wow, reinsurance company, reinsurance business, that's just the greatest thing. We should start to do that. with part of the fund that we have. What do we need to do? I mean, what are the skill sets that you need to have to start every insurance company?

28:51Andreas Berger: So first of all, you need to focus on what do you want to be and who do you want to be to service? What's your customer base? If you say - Well, we want to be a big player and make a lot of money. Okay. So I would say, let's talk about the capabilities first. Yeah. So you need the diverse spectrum of all capabilities that you can have. It's a multidisciplinary approach. We have scientists, physicians, we have engineers, we've got mathematicians, actuaries, we've got lawyers, business administration.

29:27Nicolai Tangen: So the full spectrum.

29:30Andreas Berger: Yes, exactly. The full spectrum. Yeah. Chemists and the full spectrum we have. Why? Because the exposure and the risk pool is so diverse. And to get a good understanding of all the aspects of risk, we need this diversity. And if people are very curious, this is an industry to be in. So risks are diverse. When you switch on the TV, Nikolai, for instance, and you watch the news, every aspect of the news has to do with green shows. so for me it's super fulfilling yeah so we are operating when you read the news do you sleep afterwards or do you have nightmares or no because we make the world more resilient yeah so you need to find answers for this and i think that's exciting and you bring in your knowledge but then also in working in global teams we have 1075 teams at swissery who operate at a global level who are not sitting in one office like we do sit at one table.

30:33Nicolai Tangen: So let's talk through these capabilities that you have then. So, you know, how many are actuaries? Just what do people do?

30:41Andreas Berger: For instance, we have 50 researchers who think about natural catastrophes day in, day out. We have around 200 models. So each event outside in the world is one new data point that will be integrated and keep our models updated. So we probably have one of the most complete models worldwide. So that's one discipline. But if you go out and have to assess a data center, so you obviously have a lot of information through your desk research and risk engineering work and desk exercise, but you also go out. For that, you need to have people who have a deep understanding of what they're actually assessing.

31:29Andreas Berger: So that's why these various disciplines are being brought to the party. Just to give you those examples, we also have people who are pure underwriters. That's what we do. We're an underwriting company. And underwriting also includes, for me, claims. And we train people who come from various different disciplines to actually do underwriting. There's a clear curriculum. We've got a new leadership architecture and training architecture where we also include AI elements.

32:04Nicolai Tangen: And underwriting is basically to decide how you price risk. Yes. Because you can make the biggest reinsurance company in 10 minutes by just taking on all risks at the wrong price.

32:18Andreas Berger: Yes.

32:19Nicolai Tangen: The wrong price. I hope you don't do this. No, of course not. And then you blow up. Yes. When the losses start to happen. How do you train people to walk away from the wrong risks?

32:30Andreas Berger: Yeah, so we have a clear understanding of our risk appetite.

32:33Nicolai Tangen: Because you can't remunerate people on the amount of business they write, because they can write the wrong one, right?

32:39Andreas Berger: No, you're absolutely right. It comes down to the incentives. I mean, we have a clear view on what our risk appetite is. Where we deploy our capital, we need a return on this, and then obviously this is translated in capacity deployment. And then we tell people, you're not forced to grow. You're forced to grow the bottom line, we always call it. So the incentivization is really to understand the risk properly and make sure that it's not growth for just for the sake of growth. And I think that's this dilemma that an underwriter always is in. And that's why an underwriter is an underwriter. And a good underwriter can balance it, can understand where can I grow, where can I deploy my capacity, where I get the return.

33:23Andreas Berger: So you better understand the risk. And we have tools that give you an indication also of pricing and the terms and conditions. And then the negotiations out there in the market, in a very competitive market environment, might actually push you into a decision that you normally wouldn't take. And that's something that we watch very carefully. So the people who work here are, on average, extremely risk averse? no you know i know this is a discussion we have internally all the time because when we say the market is not in a situation where you should grow now because the terms and conditions or the rates are not risk adequate so then as the moment comes where the markets are turning you need to switch

34:10Nicolai Tangen: your mindset then, because then suddenly you can write more.

34:14Andreas Berger: And that moment is very decisive, because once you are in this defense mode, to switch then again into a more offense mode. So that's when soft markets pivot into hard markets. That's a very interesting psychological thing also.

34:31Nicolai Tangen: I'm just thinking a firm full of very risk conscious people. I'm just wondering what the Christmas parties look like.

34:37Andreas Berger: We had recently a Christmas party in Zurich. We had, I think, almost 2 ,000 people. Great party.

34:43Nicolai Tangen: So you still know how to party.

34:52Nicolai Tangen: So how is AI changing the way you work?

34:56Andreas Berger: I think AI is changing our work dramatically. We have been dealing with AI for quite some time. So we were at an early stage already working with machine learning, advanced analytics, etc. We are a data company and people company. We think in data models. So we have established a clean data strategy with a front-end ontology and then based on a clean, globally integrated data platform. Now we're AI ready, I always call it. because every AI use case we have will instantly be integrated into our data and technology infrastructure. So that's where you can then detract the benefits. Because the problem very often is that data and technology is outdated, it's fragmented, huge IT legacy and IT debt, so that the individual AI use cases are still standalone use cases and cannot be integrated into your data and technology infrastructure.

36:13Andreas Berger: So the benefits are not visible. I think that's the biggest problem we have in the industry. Now, what we do with AI, We use AI also to augment, to improve our decision-making. But we also use it to improve our processes.

36:32Nicolai Tangen: What do you think quantum computing will do?

36:36Andreas Berger: Well, this is the next development. Now, quite frankly, I am happy if we manage phase one and implement, in particular, Genetic AI because the change we go through is massive because it changes the way people work today. We have to reimagine our processes. Now, quantum computing comes obviously because we deal with such an amount of data, but I'm happy if I do step one and actually implement it properly and generate the benefits. The rest, it's very far away and will come as a next step then for me.

37:22Nicolai Tangen: Now, you got a lot of money because people pay you premiums and so on and you put them into capital markets. So it's an important part of what you do, right? Absolutely. How you invest your capital base.

37:37Nicolai Tangen: What is your view on markets now?

37:41Andreas Berger: Yeah. So, I always call it the yin and yang in our insurance industry. We were talking about the liability side. Now there's the asset side of the balance sheet. And they all belong together. They're so important for delivery of our net income, for instance.

37:56Nicolai Tangen: So, the yin and yang means also… So, liability, the kind of things you potentially have to pay out. And the asset side is the capital you have, which you put in financial markets. Yeah.

38:06Andreas Berger: We assume risk on the liability side. That's the underwriting that we were talking about. And now there's the ALM, the asset liability management piece that translates into the SAA, strategic asset allocation. Then we give it to a partner, an asset manager, or sometimes we also do it ourselves. Give us a feel. How much money do you have in – how much money have you got investors? So we have assets under management north of$100 billion. Obviously, as we grow the business, this will also grow. So that's the magnitude that we have. And then we have a strategic asset allocation that is obviously dependent on the liabilities and the payout patterns.

38:44Andreas Berger: So the claims paying ability we have to show and capability we have to show all the time. So we have a pretty conservative asset allocation, but we work with all partners. But then also, it's not just the asset management side to protect sort of the yin and yang side, as I said. We also are bridging from the insurance, the liability side, towards capital markets, the insurance linked securities markets. We're one of the first ones, the founders of the insurance linked security markets. We've got some notional$50 billion in the market out there. So I think that's a significant market. And we have cat bonds that we issue.

39:26Nicolai Tangen: Catastrophe bonds, yeah.

39:27Andreas Berger: Catastrophe bonds that we issue. Where you get money and then if there is a catastrophe, you basically don't get so much money? Well, the cat bonds, catastrophe bonds are a nice instrument in particular for institutional investors. It diversifies quite nicely with your assets that you have and the returns are quite attractive. So we have seen between 11-14 % returns. I think that's very attractive. But I think it's more for professionals, for institutional investors. There are trends now to bring it more to private individuals. I would say this is an instrument for professionals, so I think, because there's also risks attached to it.

40:06Andreas Berger: Totally.

40:10Nicolai Tangen: Andreas, how would you characterize the corporate culture in Swiss Re?

40:15Andreas Berger: Swiss Re has more than 120 nationalities. We operate in around 70 countries, offices. We've got 70 offices in countries. We are global in nature. We are diverse in nature. We've discussed about the disciplines, the capabilities that we bring together here. So that's the nature. That's the company who we are. We have a very collaborative culture. We have a big, big tradition. It's a 160 years old company and people see that there's a lot of risk insight, risk knowledge and that's what people are proud about. And if you combine this risk knowledge, risk insight with a highly collaborative spirit and add now the performance aspect to bring solutions to the customers, I think that is a nice dynamic and energetic environment.

41:15Andreas Berger: Very highly educated. On average, yes. So we have graduate programs, we have partnerships with universities that we're very proud of. But we are looking for experts, yes, but also, in particular, experienced people. So when you look at the recruitments that we have, a lot happens with experienced people. But we still have also graduate programs.

41:42Nicolai Tangen: You are relatively new as a CEO. What part of the corporate culture are you trying to change?

41:50Andreas Berger: I try to maintain what Swiss Re stands for and the customer's value. But I'd like to emphasize a few points. The core business. We are an underwriting company. So we should be proud to be an underwriting company. Because that's why customers come to us. They like our expertise, our creativity to find solutions. But I also like to have the performance, the performance view. We always call it close the gap to number one because that's a mindset. People always ask me, what does my number one mean? No, I said, that's the mindset. In your activity, who's number one? And what's the gap to number one?

42:33Andreas Berger: Can you close that gap? It's not about being the biggest all the time. But to have that will to win, that edge, to find the best solution for the customers, but that also bring a financial outcome that satisfies our shareholders, for instance. This need to win, where do you have that from? I'm a competitive person, but I'm a team player. I always did team sports and I loved it. So I refer to my leadership team as a football team. Everybody has a role to play. if somebody tries to play other people's role, it doesn't work. So that's something that we're working on, and I'm really proud that we are now playing each one's role very effectively, because at the end we need to score.

43:25Andreas Berger: You've got people in the defense, they need to keep your goal clean, and then you've got people who steer, and then you've got people who have the interface to the markets, the business unit CEOs, for instance, but also asset management.

43:39Nicolai Tangen: Now, you were born in Rwanda. Do you think that impacts the way you play football?

43:45Andreas Berger: Oh, I never thought about that. Rwanda is a beautiful country.

43:50Nicolai Tangen: Do you feel like this outside in view, does that impact the way you think about Swiss Re, you think?

43:57Andreas Berger: Maybe one aspect shaped me. As I was confronted with a lot of changes, or uncertainties, there was a coup d 'etat and in Portugal it was a revolution, I always take a step back and try to analyze what does that actually mean, also for me personally, for family, for you as an individual. And that probably is something that I applied in business to not shoot from the hip, to really analyze the situation. And in today's world, with all the uncertainties, with changes every day, you've got to think all the time, what does that actually mean? Don't panic. So I call it strategic patience that I apply personally, but also professionally.

44:46Nicolai Tangen: Tell me how that works, being so analytical and less prone to gut feel.

44:53Andreas Berger: No, no, no. I'm an 80-20 person. Okay. So analysis are very important, but you cannot always go for the 100 % analysis. The last 20 % are actually slowing you down and don't give you that assurance and that maximum insight anymore. So I'm really 80 % person where I'm saying, look, as we have 80%, let's go out and do it. And then course correct as we go along. I think that made our company quite successful also in this whole transformation that we went through. And I'm very happy with this approach.

45:32Andreas Berger: I'm a people person, so you can analyze to death, but at the end of the day, we're sitting opposite each other. It's a relationship, it's a trust, and I have to have a good feeling about this. I always call it the sniff test.

45:46Nicolai Tangen: What's been the most important person in your life?

45:49Andreas Berger: I had many important people. I mean, obviously, I could say my family was important and is important. and actually every personal interaction that I value is important but the foundation is a family

46:06Nicolai Tangen: and who's been the most important influence from kind of outside the world of business any particular inspiration you've had I'm very interested in in international politics yes and

46:20Andreas Berger: And I read many books about it. And I learned about history. And I learned about leadership. So each and every individual had certain specific aspects in a certain context. And I was interested in that. Why did certain people take, leaders take decisions in a very critical moment? And because there was probably a choice. now I don't want to pick one name because there were so many very very good different leaders and that's why people say oh who was your role model I say you know I learned from many people in business but outside business it's about yourself your balance how do you become the person you are today and it's through many interactions through learning a lot by observing and then be yourself.

47:21Nicolai Tangen: And if you were to give advice to young people, what would that be?

47:25Andreas Berger: Actually, I was just recently giving a lecture at university and people asked me exactly the same question. So stay curious. Be open-minded, but also feel very grounded and have a balance. But when you want to become a leader, there's two aspects. When you want to become a leader, you think about three things, and that's what I try to do also as we operate here with all the changes. Anticipation. You need to anticipate. Imagine a situation that's not today. In business, for instance, you need to anticipate a situation. How does AI look like in future? That's number one, anticipation. Number two, self-motivation.

48:17Andreas Berger: Because everybody will tell you it doesn't work. More than 80 % of the people don't like change. They say that they change, but they don't like change. So you need to be self-motivated all the time. And thirdly, you need to have inspiration because you need to take people along. So those three aspects are very important. Then the other part that I say, do your current job as if it were your last. don't always look for the next job because you get distracted and then the last thing is and that's really something i believe in because i i practiced it so so many times help people do something good for others try to help solve a problem for others without expecting anything in return the rest will come absolutely well we are recording this on a on a

49:08Nicolai Tangen: Friday in Switzerland. It's a lot of snow outside, but you don't ski. So what do you do?

49:17Andreas Berger: Well, there's many things you can do on a Friday. It's always the evening dinner with the family.

49:23Nicolai Tangen: Yeah. What do you read, for instance?

49:25Andreas Berger: I just recently read a book, Klausowitz on war. And during my Christmas holidays, I read a book. I can recommend it to you. It's called Jacaranda. The author is called Gael Fay. He's a French one whose mother is from Rwanda and the father's French. Fantastic book, nice description about the situation in Rwanda because he went there to find out who the family of his mother was. And it related to me. My father's German, my mother's from Rwanda. So I think it was fantastic book. It won some awards in France, a very well-known author. So, Jacaranda.

50:09Nicolai Tangen: Very good. Well, we'll finish off with that recommendation. It's been great having you on. Big thanks.

50:16Andreas Berger: Thank you very much, Nikolaj.