The SoftBank Group Corp. The billionaire Masayoshi Son is expected to hold 10% or less of Swiss Re Ltd to gain a foothold in the high-liquidity reinsurance industry. The companies are talking about strategic cooperation and anchor investment, said Swiss Re on Wednesday in a statement. It is the first time that the insurance company has commented on the size of the possible business. SoftBank considered buying as much as a quarter of the company's deal in a deal that valued the insurer at up to 37 billion francs ($ 39 billion), Bloomberg News reported last month.
A deal would follow Japan's third-largest man, with other business titans like Warren Buffett trying to capitalize on the cash flow returns. Son transforms the Japanese mobile operator SoftBank into a technology investor through its Vision Fund and sees areas of potential collaboration with Swiss Re.
Reinsurance companies generate cash flows from the premiums collected. In cooperation with Softbank, Swiss Re could use the technology of the Japanese conglomerate and access to high-growth Asian markets to stimulate growth, said Stefan Schürmann, an analyst at Bank Vontobel AG, to clients in February.
"With SoftBank as As an anchor shareholder, the reinsurer would gain a replacement investor to protect its balance sheet in dire years."
Reinsurance company threatened
The traditional reinsurance model has come under pressure in recent years as hedge funds piled in excess the competition of competitors such as emerging markets like GIC Re and Qatar Re from India is rising.
"The technology will fundamentally change the value chain of insurance in the coming years," said Christian Re Chief Executive Officer Christian Mumenthaler said in the run-up to the investor day of the company: "I am convinced that this will blur industry boundaries and insure risks shifting the lines of insurance Swiss Re's technology strategy aims to develop new risk pools and manage existing ones more effectively. "
The reinsurance industry should benefit from rising prices after a series of natural disasters last year, especially in the area of damage – and accident insurance and corporate solutions Re said. Rising interest rates should also benefit the company's investment returns,