Christian Mumenthaler: Looking to the future ahead
Leadership, emerging markets and the impact of new technologies in the industry, some of the topics the Swiss Re man discussed with GR
Becoming the Group CEO of one of the world’s biggest and most powerful reinsurers is a huge responsibility, and taking the baton from Michel Liès also has its pressures; what vision do you have for Swiss Re’s future, and how do you intend to make your mark as Swiss Re’s CEO?
I’m very enthusiastic about our business model and our vision to make the world more resilient. I have been at Swiss Re for 17 years now and I was part of the team that defined our new strategy, in which we focus on being a risk-knowledge company that invests into risk pools. Therefore, it would make no sense to start to change the strategy now – it works and will be our guiding light in the next years. This said, I am clearly taking over in challenging times, so short term we need to focus on underwriting and cost discipline so that our ship is in order when clients need us.
Swiss Re has always strived to lead in thought leadership for the industry. How important is this to the brand and to the industry as a whole?
It’s extremely important. We’ve been around for over 150 years, in which developing knowledge and collecting data has been part of our business model from the beginning. In these times when capital is plentiful this risk-knowledge asset is becoming even more important when supporting clients with their business, for instance to help them develop new products.
During your time at Swiss Re, you have worked across both life and non-life. Can more be done to create a synergy between the two when looking at industry innovations? (For example, the Internet of Things is being explored by life via wearables, but hasn’t really been utilised on the non-life side). If yes, does Swiss Re have any plans to do so?
Indeed, I think P&C can learn quite a lot from L&H, since P&C is typically a risk-transfer business that is done on a deal-by-deal basis, whereas L&H is much more of a service-oriented business. For example, we own the pricing of risks in L&H through our underwriting manual called Life Guide. It has been developed over decades by medical doctors and is used every day by thousands of clients for underwriting risks. So L&H is all around research, development, servicing and partnering with clients on new products. I think that this is something we could do more of in P&C.
The digital landscape could currently be described as the biggest disruptor and opportunity for the (re)insurance industry. What plans does Swiss Re have to explore and capitalise on digital and our evolving societies?
Digital technology will clearly have a big impact on primary insurance in the next few years. We see four areas in which digital innovation will take place: namely in acquiring new clients, in underwriting and risk selection, around reducing the costs of the value chain where significantly cheaper value chains are conceivable with modern technology, and lastly around creating new services for customers (think for instance a motor app that gives feedback to the driver). We see a lot of focus on the first and the second one, but it is my personal view that the biggest value creation will probably be in reducing cost of the value chain and creating completely new services.
I think that reinsurance will be less affected over the next few years, meaning that we can and should focus on digital innovations that are relevant for the primary insurance industry and where we as a reinsurer can help our clients to help develop themselves in these areas.
Which emerging markets will Swiss Re be exploring in the next 12 months and why?
We’re focused on a number of high-growth markets in all regions. We have defined our top markets a while ago and intend to stay on course there. Our current focus markets are China, India, Indonesia, Mexico and Brazil. We have a long-term focus in two areas, which are Vietnam and Sub- Saharan Africa.
Could you tell us more on this long-term view of exploring Sub-Saharan Africa? From my understanding a lot of this focus has been on the east coast. Does Kenya have the right ingredients to provide Sub-Saharan Africa’s first hub in the future? Or are there other countries that could provide a focal point for (re)insurance?
I believe that Africa is likely to be the next frontier market. We’ve developed the so called S-curve, which shows the statistical relationship between economic development (measured with GDP per capita) and insurance market development (premiums as a percentage of GDP). Valuations of primary companies typically jump when companies are in the middle of that curve, like in China and in India, where there are huge growth rates.
This leads us to believe that companies like Swiss Re, who have a long-term horizon, can invest in minority stakes of such insurance companies that are not yet on the S-curve, like in Sub- Saharan Africa. Our strategy is to develop reinsurance but also to participate in the potential future upside of the insurance industry. In this effort, we look at the whole of Sub-Saharan Africa, not just the east coast, and Kenya is one of several key markets.
If you had to describe your leadership style in three words, what would they be and why?
I’m extremely passionate about trying to get the best people for each job, and I like to give them the freedom to perform and the flexibility so they can be effective. I value a relatively informal style and two-way feedback.
What advice would you give a graduate entering into the (re) insurance industry?
When I was much younger, someone told me that you can rate three things in a job: your boss, your work and your salary. It’s rare to be able to give points to all three at the same time, but a good boss is the most important. That has stuck with me throughout the years, so my advice would be: try to get the best possible boss. Also, seize every opportunity and reach out to colleagues in other areas of the company you’re in. Get to know what others are doing and why, this will open personal growth paths.