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Swiss Re's CEO Discusses Q1 2012 Results - Earnings Call Transcript

On the capital side of things, from an economic capital perspective, which is the main constraint that the firm will typically face, this is one of the peak perils from a nat cat perspective, but it's not as large as the two largest, so European windstorm or Atlantic hurricane?

If you look at the additional capacity that we have deployed today, I think I understood, I look out the number. We've deployed about 40% more in capacity. I think if you translate that into a capital impact, it would be much, much less than that for this peril, because it partially diversifies. So, from a – I think if you look at it from a probably the simplest, if you switch to S&P, S&P's going to be the easiest way to look at it, because it's factor based. I think if you take about half of the premium growth, I will give you some idea of additional capital deployed. So, the additional capital requirements for this business, this renewal are really, really quite small.

When the target combined ratio for Corporate Solutions, so, you’re right we gave guidance for the group overall for all the P&C business of 94%, which is split 93 for reinsurance and an expectation of 101 for Corporate Solutions, just given the nature of what Corporate Solutions does I think you have to expect that there is more, I hate to call it good or bad luck, but more natural variability beyond the peer and that kind of component. So they’re obviously significantly exposed the manmade losses and that will also drive short-term variation and the combined ratio. So we don’t see any reason to change the guidance that we gave and I’d simply look at the five points of difference so it’s well within the natural volatility that you can expect to see from this business given the types of risks that it writes. I expect the combined ratio to be volatile going forward.

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