Swiss Re and the San Francisco earthquake
Categories
Swiss Re
Catastrophes
Time
1906
Locations
San FranciscoCountries
United Arab Emirates, United Arab Emirates
Swiss Re felt the impact of the San Francisco earthquake by way of six reinsurance treaties for the fire portfolios of five European cedents. Swiss Re retroceded around 47% of the original cessions to five other insurance and reinsurance companies from Continental Europe.
The net loss for Swiss Re was CHF 4.3 million, a considerable amount compared to the company's total equity in 1906 of CHF 9.9 million. However, excellent business results during the previous and subsequent years enabled the company to cope with this loss.
Swiss Re proved itself to be a reliable partner, meeting all of its payment obligations, despite claims amounting to almost 50% of the company's entire annual non-life premium income and constituting the biggest loss since its establishment. In honoring its commitments, Swiss Re demonstrated its capital strength and consolidated its excellent reputation worldwide.
As a precautionary measure, Swiss Re considerably reduced its risk exposure in California after the earthquake. The two treaties with the biggest losses were cancelled in autumn 1906 with effect from spring 1907. At least one cedent ceased underwriting business in California, while another treaty expired at the end of 1907 and was not renewed. Only when Swiss Re had built up sound reserves did it venture into the US market again.
The San Francisco earthquake was a turning point in the history of insurance: Over 250 insurance companies worldwide were involved in the disaster, more than ever before. This international network of insurers was a major reason for society's ability to cope with the growing risks posed by an industrialising world.
The net loss for Swiss Re was CHF 4.3 million, a considerable amount compared to the company's total equity in 1906 of CHF 9.9 million. However, excellent business results during the previous and subsequent years enabled the company to cope with this loss.
Swiss Re proved itself to be a reliable partner, meeting all of its payment obligations, despite claims amounting to almost 50% of the company's entire annual non-life premium income and constituting the biggest loss since its establishment. In honoring its commitments, Swiss Re demonstrated its capital strength and consolidated its excellent reputation worldwide.
As a precautionary measure, Swiss Re considerably reduced its risk exposure in California after the earthquake. The two treaties with the biggest losses were cancelled in autumn 1906 with effect from spring 1907. At least one cedent ceased underwriting business in California, while another treaty expired at the end of 1907 and was not renewed. Only when Swiss Re had built up sound reserves did it venture into the US market again.
The San Francisco earthquake was a turning point in the history of insurance: Over 250 insurance companies worldwide were involved in the disaster, more than ever before. This international network of insurers was a major reason for society's ability to cope with the growing risks posed by an industrialising world.
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Categories
Swiss Re
Catastrophes
Time
1906
Locations
San FranciscoCountries
United States, Switzerland
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