Innovative Solutions for Insurer

Off-balance-sheet treatment:
Securitization allows insurers to shift both real estate exposures and mortgage loans off their balance sheets. This transition enhances important financial ratios like leverage and solvency by decreasing balance-sheet intensity and spreading out risk.

Reduced capital requirements:
By passing on the risks tied to directly owning real estate or originating mortgage loans to investors through securitized products, insurers can reduce their regulatory capital needs. This process frees up capital that was previously tied down, enabling institutions to invest more effectively in other strategic areas or focus on their core business.

Mitigates exposure:
Securitization enables insurance companies to bundle and transform illiquid assets — including directly held real estate and mortgage loan portfolios — into liquid, tradable securities. By doing so, insurers can significantly reduce concentration risk associated with holding individual properties or a limited number of large mortgage exposures.

This structured approach to risk transfer broadens diversification across asset classes and investors, mitigating exposure to market volatility, credit defaults, or regional downturns in the property and mortgage sectors.

Increased liquidity:
Securitization enhances liquidity and capital efficiency by transforming illiquid assets — such as directly held real estate and mortgage loan portfolios — into liquid, tradable financial instruments. This allows insurers to access cash more quickly when needed, without the delays typically associated with selling properties or loan portfolios on the market. This provides greater flexibility in managing the balance sheet and optimizing the capital structure.

Solvency and regulatory benefits:
Securitised products can help insurers meet regulatory requirements such as solvency or Swiss regulatory standards by ensuring compliance with liquidity and capital adequacy regulations.

Asset monetization:
Through securitization, institutions can unlock the capital tied up in low-yielding or long-term assets, including real estate holdings and mortgage loans. The released funds can then be redeployed into more productive or higher-return investments, improving overall portfolio performance and capital utilization.

Retention of asset management in Real Estates:
Under allswiss’s securitization model, the Originator — such as insurers or pension funds — can retain the role of asset managers for the underlying properties. This structure ensures continuity in asset oversight and creates an ongoing or future income stream, while still achieving balance-sheet and capital efficiency benefits through the transfer of risk and ownership.

Balanced portfolio:
By securitizing both real estate holdings and mortgage loan portfolios, institutions can achieve a more balanced and diversified investment structure. This diversification reduces exposure to market downturns or sector-specific risks and provides greater portfolio resilience across varying economic cycles.

Loan Servicer:
Under allswiss AG’s securitisation model, the Originator — such as insurers or pension funds — can be retained as loan servicers of the loan portfolio, ensuring client relationship. 

By keeping the loan servicing in-house, Originator can uphold performance standards, maintain transparency in asset performance, and ensure consistent communication with his clients. 

The transaction is usually processed as a ‘silent transaction’.

Right of first refusal/right of buy-back:
As part of the securitization structure, sellers may be granted a right of first refusal or a contractual buy-back option. Secured by a land charge or equivalent collateral arrangement, these rights allow institutions to repurchase specific properties or underlying loan exposures in the future — preserving strategic flexibility while still benefiting from the liquidity and capital efficiency generated by the transaction.

Capital Relief (Solvency II / SST):
With a Structured Risk Transfer (SRT), insurance risks can be partially shifted to outside investors. This not only reduces the Solvency Capital Requirement (SCR) but also allows for a more efficient allocation of capital. The capital that gets freed up can then be redirected towards growth initiatives, innovative projects, or even returned to shareholders.

Balance Sheet Stability and Earnings Protection:
An SRT plays a crucial role in stabilizing financial results and safeguarding the balance sheet from unexpected loss events. This leads to more predictable cash flow and bolsters the company’s credit rating, enhancing its overall financial strength.

Access to Alternative Investors:
SRTs create opportunities for capital market investors who are ready to take on insurance risk, often offering more competitive terms than traditional reinsurance options. This expands funding possibilities and provides the insurer with greater strategic flexibility.

Customizable Structure:
Every SRT can be customized to fit the insurer’s specific risk profile, capital goals, and accounting needs. Design elements—like duration, attachment and detachment points, repayment terms, and loss triggers—can be adjusted to meet the desired capital and risk management strategies. The outcome is a tailored solution that can complement or even replace standard reinsurance programs.

Strategic flexibility:
Through SRTs, insurers can selectively hedge risks, release capital, or expand into new markets, while maintaining operational control over the underlying assets or insurance portfolios.

Risk diversification:
By transferring selected layers of risk to the capital markets, insurers can reduce concentration risk within particular portfolios, business lines, or geographic regions.

Capital and balance sheet management:
An SRT allows insurers to transfer specific insurance or investment risks without disposing of the underlying business. This provides greater flexibility in managing the balance sheet and optimizing the capital structure.

Solvency II optimization:
Properly structured SRTs can qualify as genuine risk transfer transactions under regulatory frameworks such as Solvency II or the Swiss Solvency Test (SST), directly strengthening solvency ratios.

Rating benefits:
Reduced risk exposure and stronger capital metrics can lead to rating upgrades or improved outlooks, lowering refinancing costs and boosting market confidence.

Ongoing income potential:
If the insurer retains the role of servicer or asset manager for the transferred assets, the transaction can generate continuous fee income while still achieving capital and risk relief benefits.

ESG integration:
SRTs can be structured to align with ESG (Environmental, Social, Governance) objectives — for example, by securitizing green mortgage portfolios or sustainable investments — enhancing the insurer’s sustainability profile.

Flexible structuring:
SRTs can be tailored as synthetic, funded, or unfunded transactions, addressing different types of risks (credit, market, or insurance-related) depending on the insurer’s needs and balance sheet strategy.

Role of allswiss as Financial Service Provider:
allswiss serves as the go-to partner for financial structuring and implementation in these transactions, effectively connecting the insurance sector with capital markets. Here’s what they do:

• allswiss conduct a thorough analysis of the insurer’s capital and risk profile.
  allswiss structure the SRT to meet both regulatory and accounting standards.
• allswiss facilitate investor participation and work with reinsurers & financial institutions.
• allswiss provide ongoing monitoring and reporting on performance throughout the entire transaction lifecycle.

By blending financial engineering with regulatory and actuarial know-how, allswiss makes sure that every SRT not only optimizes balance sheet and capital results but also stays fully compliant.