What might have been: Swiss Re, SoftBank call off talks

World’s second-largest reinsurer ends talks with one of the world’s largest tech investors. SoftBank's array of new economy companies could have helped Swiss Re meet the challenge of change.

Swiss Re and SoftBank have ended discussions about a minority investment by the Japanese conglomerate, the reinsurance company said in a statement on Monday.

On February 7, Swiss Re had said it was in early-stage talks with Masayoshi Son’s Softbank. Neither company offered an explanation as to why the talks failed to result in a deal.

SoftBank’s Vision Fund, founded in 2016, has been a prolific investor around the world across recent years. Investors and equity analysts have called into question the strategy behind its ragbag collection of investments.  

Selling a significant minority stake to SoftBank would have been credit positive for Swiss Re over the longer-term, ratings agency Moody’s said in a statement on February 9.

Softbank’s communication and technology expertise and network of hi-tech investments would have given the reinsurer a competitive advantage as well as access to an additional deep capital base.

Widespread adoption of autonomous vehicles could cut the frequency of motor accidents which could lead to lower demand for traditional motor insurance.

However, other technologies such as IoT-enabled sensors could provide loss mitigation and early warning services, complementing insurance sold to commercial customers.

SoftBank, with its mobile data networks in the US and Japan, stakes in technology companies such as chipmaker ARM, ecommerce group Alibaba, and ridehailing firm Uber through its Vision Fund would have given Swiss Re access to a broad stable of expertise, Moody’s said.

However, Swiss Re said it would explore business ideas with the portfolio companies of SoftBank.

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