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Berkshire Hathaway Specialty Insurance

Swiss Re Corporate Solutions reviews aviation business

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Swiss Re Corporate Solutions has confirmed it is reviewing the future of its Australian aviation business, as the company looks to improve profitability.

Brokers have told insuranceNEWS.com.au the company has stopped writing new aviation business, leaving “a huge hole” in the local market.

Without Swiss Re Corporate Solutions, brokers say QBE and Lloyd’s would be the only significant remaining capacity providers.

“The market is about to get very turbulent,” one broker said.

“Swiss Re Corporate Solutions pulling out would leave a huge hole in the market – they are the second largest capacity provider in Australia.

“With Lloyd’s also pulling back, there will be people flying around without any insurance.”

A Swiss Re Corporate Solutions spokesman told insuranceNEWS.com.au a strategic review was taking place with the aim of improving profitability, but that “different options” were still being considered.

“There are a number of lines where we are having to reduce exposure,” he said.

“General aviation is one of those. We are still renewing business while options are being discussed, and of course any current commitments will be honoured.”

In 2015 Swiss Re Corporate Solutions acquired the aviation business of Assetinsure, which resulted in the addition of the Brisbane office.

Swiss Re warned at the end of last month that Corporate Solutions would be “actively reducing risk exposures in specific lines” after reporting a net loss of $US403 million ($594 million) and a combined ratio of 132.8% in the first six months of this year.

The Swiss Re Group reported net income of $US953 million ($1.4 billion) for the period.