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The Value of RiskSwiss Re and the History of Reinsurance$
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Harold James, Peter Borscheid, David Gugerli, and Tobias Straumann

Print publication date: 2013

Print ISBN-13: 9780199689804

Published to Oxford Scholarship Online: April 2014

DOI: 10.1093/acprof:oso/9780199689804.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use.date: 18 May 2022

Crash and Salvation

Crash and Salvation

Chapter:
(p.248) Chapter 13 Crash and Salvation
Source:
The Value of Risk
Author(s):

Harold James

Peter Borscheid

David Gugerli

Tobias Straumann

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199689804.003.0014

Given a very small home market, the company was forced to seek business abroad from the very beginning. With the help of a general manager recruited from Generali Insurance in Triest, the company soon signed international risks as far away as Haiti but struggled enormously to survive the first decade of its existence due to heavy losses in the fire business. The almost complete lack of adequate risk-measuring allowed clients to offload their worst risks onto reinsurers, and the industry involuntarily increased moral hazard in the insurance industry. Managers resorted to lowering the share capital to free money to pay outstanding claims and subsequently contemplated giving up the fire business altogether but eventually managed to improve the quality of the risk portfolio.

Keywords:   expansion abroad, fire business, share capital, underwriting strategy

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