Swiss Re has announced it is staying in the guaranteed critical illness market following the closing of its acquisition of GE Insurance Solutions.
Swiss Re Life & Health has written to clients informing them of the completion of the deal and has confirmed all GEI’s lines of business will stay open, including guaranteed critical illness (CI).
It is not yet known whether the company will write new guaranteed CI business, but Tim Dickenson, head of communications for UK, Ireland and Africa at Swiss Re, says it will continue to monitor the performance of all business on an ongoing basis, and will continue to write new guaranteed CI business where it already has arrangements in place.
Swiss Re pulled out of the guaranteed CI reinsurance market in May 2002, which for a short time led to concerns about the availability of guaranteed CI product capacity, as well as pushing the cost of premiums up for consumers.
Nick Kirwan, protection market director at Scottish Widows, says it will not be clear whether the announcement will have an impact on price until further details are known.
In particular, it is not clear whether Swiss Re will maintain the same capacity for guaranteed CI which GEI had, or whether it will add what was Swiss Re’s extra capacity to the business.
Kirwan suggests it will be the former, thus maintaining the status quo in the marketplace.
He adds: “The big fear was that Swiss Re would go the other way and take GEI out of the market. This would have caused huge turmoil because GEI is so large in the market.”
If Swiss Re does decide to capture more of the market Kirwan believes the price of reinsurance would go down and this would have a knock-on effect at the consumer end by lowering premiums.
Jason King, managing director of LifePolicies Direct, says it is good news Swiss Re will support guaranteed CI going forward as it indicates growing support for guaranteed rates.
He suggests there will be a potential for greater supply, which could lead to rates going down.
He adds: “Because they are staying in the market it is business as normal. It indicates a big shift for Swiss Re because they previously pulled out. I am optimistic rates will get better.”
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