Traditional indemnity-based insurance solutions

Classic risk transfer solutions based on actual losses
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What we do Transferring the risk of financial losses

Through a traditional insurance product, the risk of a financial loss that occurred as a result of a specified but uncertain event (e.g., an earthquake), is transferred from an entity to an insurance company. In return, the insured pays a premium.

Should the specified event occur, payment is made after an actual loss assessment and investigation, with the goal to put the insured back in the position they were prior to the event. In a traditional insurance contract, claims are assessed by means of an independent loss adjuster, who determines the amount required to indemnify the insured. This amount, possibly curtailed by the applicable conditions of the insurance policy, is then paid to the insured. This form of financial compensation is what we refer to as indemnity.

The Public Sector Solutions Team leverages Swiss Re Group's in-depth risk expertise, global network of experts and wide range of different insurance products to provide our public sector partners with the coverage that meets their needs.

Case studies Our expertise in action

  • We believe that comprehensive risk management approaches and insurance have an important part to play when it comes to building and accelerating resilience strategies for society and the economy.

Further Information

Netherlands: Construction insurance

Supporting the prince Hendrik sand dyke project

An example of a nature-based solution can be found on the island of Texel, a World Heritage Site in the Netherlands, which attracts one million visitors each year. It is considered the world’s largest tidal flat system and is protected by the Prince Hendrik sand dyke. To mitigate the risk of rising sea levels and avoid any danger of major failure, local authorities looked for an innovative concept which came from a dredging company. It placed five million cubic meters of sand and planted two million marram grasses to create a landscape gradient that not only protected the dyke from erosion but enhanced the local natural habitat. The project also delivered an additional EUR 1 million benefits in fish production, climate regulation and water quality regulation. The dredging company purchased a construction all risks insurance policy from Swiss Re, which also protected the municipality, the water management agency, engineers and contractors against delivery delays and failures.

UK: National flood insurance scheme

Enabling available and affordable flood insurance for homeowners

In recent years, floods in the United Kingdom (UK) have risen in such frequency and intensity that they are causing unprecedented damage. Given the impact of climate change on northern European winter storms, this trend will likely continue or even become more severe. Accordingly, people living in the flood-prone areas of the UK have increasingly struggled to afford an insurance cover. In order to address this flood protection gap at a national level, the UK government and the insurance industry created Flood Re, a public-private partnership aimed at providing affordable insurance to homeowners living in areas with higher flood risk.

Flood Re is a national pool designed to manage UK’s flood exposure up to a 200-year return period level. Flood Re transfers a large portion of the risk to the international reinsurance market, which includes Swiss Re.

Learn more about UK's national flood insurance scheme.

USA: National Flood Insurance Program (NFIP)

Facilitating sovereign risk transfer to the private sector to reduce insolvency risk

In the US, the annual uninsured economic impact from flooding amounts to more than USD 10 billion, making it one of the most common and costly natural disasters. Founded in 1968, the National Flood Insurance Program (NFIP), which is managed and administered by the U.S. Federal Emergency Management Agency, provides flood insurance to property owners, renters, and businesses. In 2016, due to a number of large losses (including hurricanes Katrina and Matthew), the NFIP was USD 23bn in debt to the U.S. Treasury and decided to address its latent insolvency risk.

In 2016, the NFIP engaged the reinsurance industry for the first time in an effort to improve the programme’s claims-paying ability and reduce the need to borrow from the U.S. Treasury. A reinsurance structure was established to enhance the NFIP’s capacity to pay claims, improve settlement performance and strengthen the financial framework. Swiss Re participates in this reinsurance programme. Until today, NFIP continues to buy reinsurance capacity in both traditional and capital markets.

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