Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

No deal for Swiss Re and SoftBank as talks come to an end


The discussions about a potential investment deal between reinsurance major Swiss Re and Japanese technology conglomerate and investor SoftBank Group have come to an end with no deal agreed, according to an announcement from the reinsurer today

Swiss Re SoftBankTalks have been ongoing for around four months between Swiss Re and SoftBank, as the latter sought a meaningful investment stake in the former.

SoftBank had been seeking as much as a quarter stake in reinsurer Swiss Re, as the tech investor clearly saw an opportunity to combine its platform with that of one of the world’s leading reinsurers.

But as the discussions dragged on it was then reported by news sources including our sister site Reinsurance News, that SoftBank and Swiss Re could not come to agreement on the size of the stake, leaving the talks to cool over the last few weeks.

Now, Swiss Re has announced that the discussions have ended with no deal as the conclusion, saying the pair have “agreed to end discussions about a potential minority investment of SoftBank in Swiss Re.”

Swiss Re said that it will continue to work towards its own technology strategy, both through its own development and by seeking out relevant and useful partnerships with third-parties.

However, the door has perhaps been left open for collaboration, with Swiss Re saying that the two firms will “further explore business ideas between Swiss Re’s operative entities and the portfolio companies of SoftBank.”

Of course that would not be the potentially transformative deal where one of the world’s leading tech powerhouses took a meaningful sized stake in the reinsurer, that avenue now appears closed for good where SoftBank is concerned.

SoftBank could now look to start talks (if it hasn’t already) with other reinsurance giants, with one such potential candidate being Munich Re, which recently said an anchor investor would be of interest to it.

Or SoftBank could look to gain access to risk capital in other ways, perhaps looking to how it could mobilise the capital markets interest in insurance-linked returns through its expansive, consumer facing tech distribution platform.

It will be interesting to see whether these types of discussions become more frequent in insurance and reinsurance, as the urgency to become technology-driven and to get closer to the consumer pushes companies into partnerships, anchor investments and other strategic tie-ups.

With pressure on re/insurers not letting up, from efficiency capacity and insurtech strategies, the option of finding a partner (like a SoftBank) is likely to look increasingly attractive as disruption and modernisation of the sector continues.

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