The wealth manager is partnering with reinsurer Swiss Re, in a bid to expand its reach with clients as challengers to the traditional finance industry lurk.
The path to an ecosystem for banks and insurers is inevitably deals or partnerships: Switzerland's hidebound financial center is seeing a revival of old constructions like «bancassurance,» which foundered in an initial effort 20 years ago.
UBS is getting in on the idea, launching a mortgage solutions offering (in German) together with Swiss Re on Wednesday. The bundling of banking and insurance products via Swiss Re's insurtech subsidiary Iptiq is a bid to digitize production and distribution via platforms – an idea pioneered by Chinese internet giant Alibaba.
Swiss Re's Insurtech Hope
Iptiq is poised to be carved out of Swiss Re's life capital division next year. It will be placed into its own division reporting directly to CEO Christian Mumenthaler, underscoring its strategic importance to the reinsurer. The Swiss wealth manager's initial efforts into platforms are the recently-launched Key 4 as well as Atrium, a mortgage broker launched in 2017.
UBS wants to bake Iptiq into its domestic mortgage lending business – a step in the direction of an ecosystem for homeownership. Specifically, Iptiq is a data-backed product engine on which business clients can design tailored solutions – and maintain their client interface.
Cozy Swiss Ties
For example, Iptiq could offer UBS' borrowers protection against invalidity, or life insurance. UBS isn't alone in its efforts to build a wider ecosystem to interest its clients: Raiffeisen and insurer Mobiliar plan to build a joint product and services platform.
The cozy ties between Swiss Re and the Zurich-based bank are underscored by UBS CEO Sergio Ermotti, who is poised to take over as chairman of the reinsurer in April. Incoming CEO Ralph Hamers is a huge proponent of financial institutions as part of a wider, genuine ecosystem.
Treading Cautiously
The Swiss Re tie-up comes shortly after UBS in February partnered with Zurich Insurance to bank as well as insure start-ups. While bancassurance ventures are relatively common abroad, Switzerland still has considerable potential, UBS said.
With Iptiq, the world's largest wealth manager is still proceeding cautiously: it will initially trial the partnership with a region in central Switzerland. UBS said it plans to unfurl the offering across Switzerland next year.
