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Swiss Re Specialty Insurance (UK) Limited 2019Swiss Re Specialty Insurance (UK)LimitedSolvency and Financial ConditionReportFor the year ended 31 December 20191
Swiss Re Specialty Insurance (UK) Limited 2019ContentsDirectors' report . 3External Audit Requirement . 4Executive summary. 5Section ABusiness and performance . 6A1: General business information . 6A2: Underwriting performance. 8A3: Investment performance . 8A4: Performance of other activities . 8A5: Any other material information . 9Section BSystem of governance .10B1: Governance structure .10B2: Fit and proper requirements .13B3: Risk management system .13B4: Internal control system .16B5 Internal Audit function .17B6: Actuarial function .17B7: Outsourcing .17B8: Assessment of adequacy.18Section C: Risk profile.19C1: Underwriting risk .19C2: Financial Market risk.20C3: Credit risk .20C4: Liquidity risk .21C5: Operational risk .21C6: Other material risks.22C7: Other information .22Section D: Valuation for solvency purposes.23D1: Assets .23D2: Technical provisions .25D3: Other liabilities .27D4: Alternative methods of valuation .27D5: Any other material information .28Section E:Capital management .29E1: Own funds.29E2: Solvency Capital Requirement and Minimum Capital Requirement .30E3: Duration-based equity risk .31E4: Differences between the standard formula and the internal model .31E5: Non-compliance .32E6: Any other material information .32Appendix: Glossary .33Appendix: Quantitative Reporting Templates .352
Swiss Re Specialty Insurance (UK) Limited 2019External Audit RequirementThe Company has taken advantage of the audit exemption as provided by the Prudential Regulation Authority PolicyStatement PS25/18 issued in October 2018. The changes made to the PRA Rulebook with regards to the requirement for anexternal audit of the public disclosure requirement take effect from Thursday 15 November 2018.The exemption is available for those Companies that meet a threshold of a firm's risk metric based on reported gross writtenpremiums and best estimate liabilities.The Company meets the criteria set out in the PRA methodology as described in appendix 1 of the Policy StatementPS25/18, entitled PRA Rulebook: Solvency II Firms and Non-Authorised Persons: External Audit Amendments Instrument2018.4
Swiss Re Specialty Insurance (UK) Limited 2019Executive summaryBusiness and performance The Company ceased to accept new business in 2007. The Directors are currently exploring the potential to transfer the book of business to another member of the Swiss ReGroup under a Part VII arrangement Until any Part VII is concluded, The Company continues to run off its existing liabilities until expiry or settlement. The run-off continues to progress on a solvent basis and is expected to continue to do so in the future.System of governance There were no significant changes to the system of governance for the Company in 2019.Risk profile There were no material changes in the Company's risk profile during 2019.Valuation for solvency purposesNon-life technical provisions The value of inwards best estimate liabilities including risk margin were GBP 8 525 thousand at 31 December2019 (2018: GBP 10 084 thousand).Other assets and liabilities No material changes to other assets and liabilities during 2019.Capital management Own Funds were GBP 9 322 thousand at 31 December 2019 (2018: GBP 9 200 thousand).1 The Solvency II capital requirement is the Absolute Floor of the Minimum Capital Requirement which remainsunchanged at EUR 3,700 thousand. On translation to GBP 1 the Absolute Floor was GBP 3 187 thousand at 31December 2019 (2018: GBP 3 288). The solvency ratio expressed as eligible own funds as a percentage of the MCR Absolute Floor as at 31 December2019 was equal to 283% (2018: 280%).GBP:EUR 0.86133 (2018: 0.88873) published by the Official Journal of the European Union for 31 October 2019.5
Swiss Re Specialty Insurance (UK) Limited 2019Section A Business and performanceA1: General business information1. Full name and legal formSwiss Re Specialty Insurance (UK) Limited (the Company) is an insurance company incorporated in England and Wales as aprivate limited company under United Kingdom law.2. Supervisory authority and group supervisorSwiss Re Specialty Insurance (UK) Limited is authorised and regulated in the UK by the Prudential Regulation Authority(PRA) and the Financial Conduct Authority (FCA) to conduct insurance business. It operates through an office in the UnitedKingdom,Prudential Regulation Authority20 MoorgateLondon, EC2R 6DAPhone: 44 (0)20 7601 4444Fax: 44 (0)20 7601 4771www.bankofengland.co.uk/praFinancial Conduct Authority25 The North ColonnadeCanary WharfLondon, E14 5HSPhone: 44 (0)20 7066 1000http://www.fca.org.uk/The ultimate parent company is Swiss Re Ltd, a joint stock company, listed in accordance with the International ReportingStandard on the SIX Swiss Exchange, domiciled at Mythenquai 50/60 in 8022 Zurich, Switzerland, and organised underthe laws of Switzerland. For the purposes of this report, the ultimate parent company and all its subsidiaries are referred toas Swiss Re or the Swiss Re Group. The Group supervisor is the Swiss Financial Market Supervisory Authority.Swiss Financial Market Supervisory AuthorityLaupenstrasse 27CH – 3003 BerneSwitzerlandTelephone: 41 31 327 91 00Fax: 41 31 327 91 01www.finma.ch3. External auditorThe Company has taken advantage of the audit exemption as provided by the Prudential Regulation Authority PolicyStatement PS25/18 issued in October 2018.6
Swiss Re Specialty Insurance (UK) Limited 20194. Holding companyThe parent company of the Company is Swiss Re Corporate Solutions Ltd (the parent company), a company incorporated inSwitzerland as a company limited by shares. The ownership is 100%.5. Ultimate parent companyPlease refer paragraph "2 Supervisory authority and group supervisor" on page 6 for details of the ultimate parent company.6. Material subsidiariesAs at 31 December 2018, the Company does not have any investments in subsidiaries.7. Structure chart of the CompanyThe Company's parent and ultimate parent company as at 31 December 2019 were as follows:Swiss Re Ltd (Switzerland)Swiss Re Corporate Solutions Ltd 100% (Switzerland)Swiss Re Specialty Insurance (UK) Limited 100% (United Kingdom)8. Material lines of business and geographical splitMaterial lines of business and geographic areasThe Company ceased to accept new business in 2007. It continues to run off its existing liabilities until expiry or settlement.The remaining liabilities are predominantly in the following lines of business: Marine, aviation and transport insurance General liability insurance Proportional marine, aviation, and transport reinsuranceThe major geographic areas of the remaining liabilities are the USA and the UK.9. Significant business or other eventsNo significant business or other events have occurred during the year that had a material impact on the Company interms of risks or management.7
Swiss Re Specialty Insurance (UK) Limited 2019A2: Underwriting performance10. Underwriting performanceThe net technical account as per QRT S.05.01, by material lines of business, for the years ended 31 December was as follows:Underwriting performance20182019-6-7-31-90-GBP thousandsMarine, aviation and transport (direct and proportional)Fire and other damage to property (direct and proportional)General liability (direct and proportional)Casualty (non-proportional)Marine, aviation and transport (non-proportional)Total-37-97The increase in underwriting losses for
Swiss Re Specialty Insurance (UK) Limited 100% (United Kingdom) Swiss Re Specialty Insurance (UK) Limited 2019 8 A2: Underwriting performance 10. Underwriting performance The net technical account as per QRT S.05.01, by material lines of business, for the years ended 31 December was as follows: Underwriting performance GBP thousands 2018 2019 Marine, aviation and transport (direct and .
