Swiss Re reinsurer pulls the plug on digital subsidiary Iptiq

The Iptiq platform, launched by reinsurer Swiss Re with the aim of leading the company into the digital future, has not met expectations despite its initial successes. This has led to the departure of CEO Christian Mumenthaler and the decision to dismantle and sell parts of Iptiq due to its underperformance. The insurance industry faced threats from Insurtech startups and low interest rates after the financial crisis. To address these challenges, Swiss Re launched Iptiq as a startup within the group to create digital insurance products for third-party companies. However, overall business figures were disappointing with a loss of $250 million in 2023 and deficits totaling $1.1 billion over four years.

Despite the fiasco of Iptiq, Swiss Re reported a profit well above market expectations for the first quarter of 2024, leading to a significant rise in share price. The group’s return on equity is strong at 21.3 percent, and it is sticking to its profit forecast for the year. Additionally, Swiss Re has increased collateral to add a safety margin to new business in property and liability insurance. Andreas Berger is taking over as CEO from Mumenthaler, who admits that Iptiq was an expensive option in hindsight but seemed promising when it was launched.

By Sophia Gonzalez

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