Our capital structure is driven by our target to optimise the cost of capital. Equity capital is by far the most expensive, therefore we make optimal use of equity substitutes. Besides the issue of subordinated debt instruments, in 1994 we pioneered the first securitisation. Our efficient capital management brings the weighted average cost of capital down to one of the lowest in the industry, whereas the return on equity ranks among the top.
Our capital management focuses on:
- Issue of subordinated debt instruments (hybrid capital) to the maximum tolerance level of the rating agencies
- Opportunistic use of retrocessions
- Securitisations (transfer of reinsurance risks into capital markets)