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Analysis of Swiss Reinsurance Company Essay


Introduction

Swiss Reinsurance Company is a large reinsurance firm, considered as the second biggest reinsurance firm in the world. Helvetia Insurance Company started this firm in December 19, 1863 at St. Gallen. This firm has experienced a massive growth in the recent past. This may be attributed to the government support it received from the government of Switzerland and a good business environment at home country.

This firm has expanded its operations to go beyond its home country. It has found the European and American markets very attractive. Currently, this firm is operating in 25 countries. The firm has a heavy presence in European countries such as United Kingdom, Germany, France, Finland, among others.

The firm has also been able to enter into the attractive American market with its products. It acquisition of GE Insurance saw it become the second biggest reinsurance company in the world. The main products offered by this firm include insurance products, reinsurance products, and asset management. Currently, the chairperson of this firm is Walter Kielholz and the chief executive officer is Michael Lies.

The firm’s assets is estimated to be $ 215.785 billion and with an employee base of about 11,193 people in 25 different countries, for the financial year ended on December 31, 2012. Within the same financial period, the firm’s revenues were estimated to be $ 33.675 billion, whilst its profits were projected to be about $ 4.301 billion. The firm is experiencing a positive market growth.

Analysis of the Firm

According to Weber (63) when analyzing a firm, it is important to understand both the internal and external environmental factors that affect its normal operations. This scholar says that internal factors will always determine the capacity of a firm to perform better or worse than its competitors can, based on the prevailing external environmental factors at a particular time. The firm can manipulate internal factors.

On the other hand, external factors are those that affect all the players within an industry. A firm may not have control over these external factors. In order to analyze the internal factors of Swiss Reinsurance Company, SWOT analysis will be used.

Analyzing Internal Factors using SWOT Analysis

According to Hersberger (78), a firm will always succeed in the market if it has the capacity to take advantage of strength in the market. Swiss Reinsurance Company has a number of strengths that has enabled it become more successful in the market. One such strength is the massive experience it has had in the field of reinsurance. This firm has been in existence since 1863.

This massive experience has helped this firm know how to face various challenges in the market in a manner that is cost effective. It knows how to handle customers and which reinsurances to avoid based on their risks. This experience has also earned it trust with customers making it increase its market share to regions beyond Europe.

The strength of this company that has helped in propelling its growth has been its financial strength. This firm has enough financial assets to support various projects that can help it expand its operations.

Another important strength that has helped this firm is its base of skilled employees who understand the market. These factors have helped this firm experience massive growth over the years to become the second largest reinsurance firm in the world.

The Swiss Reinsurance Company has had a number of weaknesses that have affected its capacity to increase its operations in the world market. One of the main weaknesses that have affected this firm negatively is its slow response to the emerging technologies. This firm has suffered massively due to the speed at which it has been able to implement some of the new technological systems in its various plants.

According to Weber (69), large firms have always found it very challenging to adapt to changes in the market. This may explain the slow pace at which this firm has been able to respond to these changes. Another weakness that this firm has had is its inability to retain its skilled employees in various countries where it operates.

Hersberger (46) explains that it is an expensive venture to train an employee. This means that when these employees are lost, the firm will go at a great loss because it will be forced to train new employees. This has affected operations of this firm.

The market in which Swiss Reinsurance Company operates has a number of opportunities, which have been of great help in pushing this firm towards success. The massive American market has been one of the greatest opportunities that have helped in growth of this company. Another opportunity that this firm has been keen to tap into is the takeovers of large but poorly performing insurance firms.

The recent acquisition of GE Insurance propelled this firm to become one of the largest reinsurance firms in the world. The fact that major economies where this firm operates have been able to control inflation and the fact that recession is no longer an issue has helped this firm increase its customer base.

The market poses some threats despite the above-mentioned opportunities. The biggest threat is the stiff competition posed by various competitors both in the local and international markets. These competitors are very aggressive and if this firm does not find a way of remaining competitive in the market, then it may be forced out.

New government policies are also posing serious challenges, which this firm has to take care of in order to remain operational. For instance, this firm must understand varying policies of reinsurance in different countries where it operates. Failure to understand these policies may result to serious negative consequences on its operations.

This firm can even face litigation in some of the countries if its operations are considered to breach the set laws and regulations. Another threat has been the unscrupulous customers who constantly ask for compensation just to fleece finances of this firm.

These cartels always stage-manage accidents and then claim hefty compensation from this firm. This reduces its profitability and ability to expand its operations. Various governments where this firm operates are yet to come up with strong measures to curb such unethical business practices.

The external business environment of this firm has been full of a number of challenges. The economic environment was shaken by the recent world economic recession reducing its profitability. The political environment has been generally stable, especially in Europe and United States.

Technological improvements in this field have helped ease its operations, while the legal environment has been important in regulating the relationship between this firm and other stakeholders. According to Boutellier (78), external factors of a business unit will always determine the ability of a firm to operate successfully. Swiss Reinsurance Company has had a good environment both at home and in the overseas subsidiaries.

This is the reason that has helped this firm achieve its current position as the second largest reinsurance company in the world. The socio-cultural environment has not affected this firm much. This is because most of the European countries, and in the United States, the socio-cultural factors are always the same.

In the United States, Swiss Reinsurance Company has benefited from the program set by the government to curb any form of fraud by any stakeholders in this industry. This has helped in making this industry more secure and very attractive. It has also increased profitability of firms in this industry.

Conclusion

Swiss Reinsurance Company has been in existence since 1863 when it first started its operations in St. Gallen. This company has experienced numerous challenges on its path to become the second largest reinsurance company in the world. The firm has also had a number of opportunities that have helped it achieve its current state as one of the most successful insurance firms.

This firm is currently operating in 25 countries and employs about 11,193 people. The financial statements of this firm show that, its services are very profitable. Analyzing strengths of this firm reveals that Swiss Reinsurance Company has been able to understand market needs given the experience it has had for many years in operations. If the current trend of this firm continues, then this firm is destined for a greater future.

Works Cited

Boutellier, Roman. Managing Global Innovation: Uncovering the Secrets of Future Competitiveness. Berlin: Springer, 2008. Print.

Hersberger, Willy. Insurance and Risk Capital: Swiss Re’s Value Proposition. Zurich: Swiss Reinsurance Co, 2009. Print.

Weber, Christopher. Insurance Linked Securities: The Role of the Banks. Wiesbaden: Gabler Verlag, 2011. Print.

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IvyPanda. 2019. "Analysis of Swiss Reinsurance Company." December 29, 2019. https://ivypanda.com/essays/analysis-of-swiss-reinsurance-company/.

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IvyPanda. (2019) 'Analysis of Swiss Reinsurance Company'. 29 December.

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