Not surprisingly, this is a Swiss company and one that was founded in 1863 by a consortium of three major Swiss insurers - Schweizerische Kreditanstalt (Credit Suisse) in Zurich, Helvetia General Insurance Company in St. Gall, and the Basler Handelsbank in Basle. The three founded the Swiss Reinsurance Company (later to become more generally known simply as Swiss Re), based in Zurich, in response to the evident inadequacy of general insurance coverage in the country in the event of a major disaster.
The disaster in question occurred on the 10th of May 1861 when more than 500 houses in the town of Glarus were burned to the ground and some 3,000 inhabitants were made homeless when two-thirds or more of the town collapsed into ashes and rubble.
Since that time, Swiss Re has become the second-largest reinsurer in the world, with annual profits in excess of US$33 billion and total assets of more than US$200 billion.
Reinsurance is the process by which insurers insure against the risk of a run of otherwise unmanageable claims. Reinsurance, in other words, is essentially insurance for insurers.
In 1875, the first subsidiary was formed in the shape of Prudentia – specialising in reinsurance and coinsurance – and which was merged with Swiss Re in 1934.
At the Chicago World Fair of 1893, Swiss Re and Prudentia insured visitors to the exhibition during their travel to and stay in the United States.
Swiss Re also had an early entry into East Asian markets when the company enjoyed significant business in China during the 1930s.
Swiss Re was the principal insurer of the twin towers of the World Trade Centre in New York, destroyed by terrorist attacks on the 11th of September 2001.
There are landlords and there are landlords, of course. Not every landlord owns property on such a massive scale as the owners of the World Trade Centre, Silverstein Properties.
Although most landlords’ holdings in the UK are considerably more modest, certain principles remain the same when it comes to the requirement for insurance cover:
- protection for the structure and fabric of the building against fire, earthquakes, storm damage, flooding, impacts – and, possibly, terrorist attack;
- protection of the landlord’s contents of the premises;
- indemnity against claims from third parties, including tenants, who may suffer personal injury or loss or damage to their property as a result of some negligence on the part of the landlord;
- indemnity against claims from employees (if any) who may suffer personal injury or sustain an illness in connection with their work for the landlord; and
- provision for some form of compensation in the event of loss of rental income following an insured incident.
Reinsurance is essentially a form of insurance for insurers. Total risks may be aggregated and the potentially huge risks reinsured through a company such as Swiss Re.
Indeed, it was in response to large scale disaster in its native Switzerland that the need for some form of reinsurance mechanism was realised and Swiss Re was born through the actions of three Swiss insurers. The disaster in question was a massive fire that laid waste to some 500 homes and left more than 3,000 people homeless in a Swiss town in 1861.
Swiss Re was born just two years later.
Reinsurance involving specialty insurance may take the form of insurance for especially large buildings.
It may be no accident, for example, that the London headquarters of Swiss Re and therefore Swiss Re Specialty Insurance (UK) Limited is 30 St Mary Axe tower – or as most people probably know it, London’s “gherkin”, which was opened to great acclaim in 2004. Not only is the building an eye-catching addition to the capital’s skyline it is also designed to be an environmentally friendly building with many sustainable features.
It is also a prime example of the type of building which, though its sheer cost alone, is a suitable case for reinsurance. The building was sold in 2007 for more than £600 million.
Another example may be provided by The World Trade Centre, New York. It was insured by Swiss Re’s property division when it was subject to a terrorist attack and destroyed on the 11th of September 2001.
When an individual or a company buys a building in order to let it to tenants there is typically a need to insure against a number of risks:
- loss or damage to the building itself, from such major disasters as fire, storm damage, flooding, impacts and such like;
- loss or damage to the contents of the building;
- claims from tenants or members of the public alleging negligence on the part of the landlord for the cause of personal injury or loss or damage to property;
- claims from employees alleging personal injury, sickness or loss or damage to their property as a result of the landlord’s negligence; and
- the loss of rental income throughout any period that the building remains uninhabitable or unusable by tenants because of an insured event.
Swiss Re Specialty landlord insurance
As may be appreciated from the brief description of Swiss Re Specialty’s business, the value of any property reinsured is considerable indeed.
For that reason, the company is unlikely to be source for those individuals in search of landlord insurance.