HIGHLIGHTS: Andreas Berger - CEO of Swiss Re

Summary

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Episode Overview

Episode Title: HIGHLIGHTS: Andreas Berger – CEO of Swiss Re
Host: Nicolai Tangen (CEO, Norges Bank Investment Management)
Guest: Andreas Berger (CEO, Swiss Re)
Date: March 13, 2026

This episode features an insightful conversation between Nicolai Tangen and Andreas Berger, focusing on the fundamentals and complexities of the reinsurance industry, the evolving risk landscape, the impact of AI and data on the business, as well as Berger’s leadership approach shaped by his personal background. The discussion combines deep-dive industry knowledge with reflections on emerging challenges and opportunities.

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What is Reinsurance? (00:33–01:24)

• Definition and Role:
  Andreas explains that Swiss Re "insures the insurance companies," sometimes referred to as “the central bank of the insurance industry,” though technically not 100% correct.

  “We are giving financial protection to insurance companies.” – Andreas Berger [00:40]

• Why Insurance Companies Need Reinsurance:
  Insurance companies need to protect their balance sheets and benefit from global diversification of risks, which allows for lower capital requirements due to non-correlated risks across geographies and sectors.

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How Swiss Re Manages Different Types of Risks (01:24–02:31)

• Three Business Units:
  1. Life and Health Reinsurance: For life and health insurers.
  2. Property & Casualty Reinsurance (P&C): Homeowners, motor, and other general insurance lines.
  3. Corporate Solutions: Insurance for large corporates, often through their captives.
• Diversification Benefits:
  • The units are not directly correlated, offering strategic advantages.
  • Example: Natural catastrophe standalone capital return is 8%; when diversified at group level, it rises to 40%.

  “That’s the diversification benefit that I’m talking about.” – Andreas Berger [02:26]

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New and Emerging Risks: Cyber and AI (02:31–05:03)

Cyber Risk

• Data and Modeling Challenges:
  Insurability hinges on data quality and risk-modeling. Cyber is difficult as “the deep understanding of the cyber exposures is not good enough yet.” [02:58]

  “If you go out and ask people, ‘Tell me what your worst-case scenario is,’ then you get a lot of answers.” – Andreas Berger [02:50]

• Limits on Coverage:
  Because of uncertainty, insurers reduce their exposure by offering smaller policy limits.

  “We don’t know actually what the worst-case scenario actually could look like.” – Andreas Berger [03:36]
  Both Swiss Re and its partners cap exposures tightly.

Artificial Intelligence Risks

• AI Model Failures:
  Risk of malfunctioning algorithms is growing in importance, but there are governance safeguards:

  “We always have the human in the loop. We don’t allow AI to take decisions for the humans. And we have this dilemma: there’s this excitement, but then there’s also risk.” – Andreas Berger [04:32]

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Understanding Industry Cycles (05:03–06:37)

• Non-Uniform Cycles:
  Not all lines of business move in the same cycle; cycles are product-specific.
  • Swiss Re manages risks by analyzing a five-year forward portfolio and strategically shifts capacity to more attractive lines.
  • Cycle management requires deep knowledge of market participant behaviors in each segment.

  “If there’s one cycle that goes down, I probably will not grow in that area so much anymore. So I limit capacity deployment to that area and then I have focused growth ambitions in other areas that are not correlated.” – Andreas Berger [06:17]

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Digital Transformation: The Impact of AI (06:37–08:17)

• Data-Centric Operations:
  Swiss Re views itself as a data and people company with advanced data architecture ready for AI integration.
• Legacy IT Challenges:
  Many insurers struggle to integrate AI due to outdated, fragmented technology platforms—Swiss Re’s approach is to ensure AI is natively woven into their unified data infrastructure.
• Current Impact of AI:
  AI is “augmenting decision making and improving business processes,” but integration is key for visible, scalable benefits.

  “The problem very often is that data and technology is outdated, it's fragmented… so the benefits are not visible. I think that's the biggest problem we have in the industry now.” – Andreas Berger [07:35]

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Quantum Computing: Hype vs. Reality (08:17–09:05)

• Near- vs. Long-Term Focus:
  Quantum presents transformative long-term possibilities, but Berger stresses focus on successfully integrating generative AI first.

  "I'm happy if we manage phase one and implement in particular genetic AI because the change we go through is massive…" – Andreas Berger [08:25]

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Personal Leadership Philosophy: Strategic Patience (09:05–end)

• Influence of Multicultural Upbringing:
  Andreas' experiences growing up amidst political upheaval taught him to avoid snap decisions and favor measured, analytical approaches in both life and business.

  “I always take a step back and try to analyze: what does that actually mean? ... I call it strategic patience that I apply personally, but also professionally.” – Andreas Berger [09:42]

• Advice for Uncertain Times:
  “In today's world, with all the uncertainties, with changes every day, you got to think all the time, what does that actually mean? Don’t panic.” [09:41]

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Notable Quotes

• On Diversification:
  “Natural catastrophes: capital return on a standalone basis is 8%. If you look at it at group level, it increases to 40%. So that’s the diversification benefit.” – Andreas Berger [02:25]
• On Cyber Insurance:
  “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.” – Andreas Berger [03:33]
• On AI in Decision Making:
  “We always have the human in the loop. We don’t allow AI to take decisions for the humans.” – Andreas Berger [04:27]
• On Strategic Patience:
  “Don’t panic. So I call it strategic patience that I apply personally, but also professionally.” – Andreas Berger [09:50]

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Key Takeaways

• Swiss Re plays a crucial, stabilizing role in global risk management through reinsurance, offering diversification and innovation.
• Emerging risks like cyber and AI are redefining insurability, but uncertainty and data limitations demand careful limits and constant learning.
• AI and data integration are revolutionizing risk assessment, but legacy systems are a common barrier.
• Berger’s leadership style emphasizes measured analysis and “strategic patience” amid volatility and change.

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This episode offers a fast-paced yet deep exploration of the present and future of reinsurance, the central role of data and technology, and leadership in a world of uncertainty—conveyed with Andreas Berger’s practical wisdom and Nicolai Tangen’s probing questions.

Transcript

[A]

Hi, everybody. Tune in to this short version of the podcast, which we do every Friday. For the long version, tune in on Wednesdays. Hi, everybody, and welcome to In Good Company. I'm Nicola Tangen, the CEO of the Norwegian sovereign wealth fund. And today we are in a 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 US$800 million. Warm welcome, Andreas.

[B]

Thank you very much. Thanks for having me.

[A]

So, let's start with the simplest thing here. What does a reinsurance company do?

[B]

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.

[A]

So why do insurance companies need to insure themselves?

[B]

Insurance companies sit in a national or maybe also international context, but they need to protect their 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. So diversification helps.

[A]

Andreas, can we talk about the different types of risks that you insure? How do you split it?

[B]

Yeah, we focused on three business units. One is life and health reinsurance. So our insurance companies. Life and health insurance companies are clients. Property and casualty reinsurance company. That's where the insurance companies sell property, casualty, homeowners insurance, motor insurance, etc. Then we have a third unit that's called corporate solutions. There we insure 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 P and C reinsurance. And within P and C reinsurance, the two units are not directly correlated because corporate solutions reinsurance 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.

[A]

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

[B]

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.

[A]

Can we fully insure against cyber? I mean, could we with OSA and 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?

[B]

Yeah, it's really, it starts with the understanding of the exposure and that is something where we have to work together and that's the most critical piece. 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.

[A]

So you cap your exposures for each case?

[B]

Absolutely. And we have capacity limits and we have risk limits in our company also. And that's very important to measure these.

[A]

What about AI? So we make some AI models, you make some AI models in a firm, it goes totally ballistically wrong. Big losses. How can you ensure that?

[B]

Yeah, 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. 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. And we have this dilemma and managers have this dilemma. There's this excitement, but then there's also the risk.

[A]

Now the way I understand this business and the cyclicality of the business is that you have some years with big losses 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?

[B]

First of all, there's not only one cycle 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, etc. That all comes in and then we See how does my portfolio behave. And if there's one cycle that goes down, I probably will not grow in that area so much anymore. 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.

[A]

So how is AI changing the way you work?

[B]

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 with 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. 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.

[A]

What do you think quantum computing will do?

[B]

Well, this is the next development. Now quite frankly, I'm happy if we manage phase one and implement in particular gentic 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.

[A]

Then for me now, you were born in Rwanda. Do you think that impacts the way you play football?

[B]

Oh, I never thought about that. Rwanda is a beautiful country.

[A]

But this outside, do you feel like this outside in view, does that impact the way you you think about Swiss re you think?

[B]

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 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 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.