After plowing money into companies as diverse as Uber Technologies Inc., office rental specialist WeWork Cos Inc. and fintech lender SoFi, the billionaire chief of Softbank Group Corp. – Masayoshi Son is in talks to buy as much as a third of Swiss Re, a 155-year-old reinsurance giant.
The roll-out of autonomous motor vehicles is probably the greatest risk facing the insurers, since people expect it will eliminate most road accidents. As the number of claims declines, so will the primary insurers’ business, meaning there’s less to reinsure. As the industry tries to adjust to the self-driving future, the information gathered by Uber and its ilk could prove extremely valuable. Autonomous cars will spew out as much as four terabytes of data an hour. Getting those data before rivals might give a reinsurer a critical edge, letting it price offerings to primary insurers more accurately.
Despite all this it is still unsure and a huge question mark looms over why the billionaire chief is plotting this purchase. There’s the possibility too that SoftBank might be interested in tailoring insurance apps for gig economy workers such as Uber drivers. While his Vision Fund website talks loftily about the strength of its “ecosystem”, there’s little evidence so far of his portfolio companies collaborating. He’s yet to prove that he’s a true visionary rather than someone who got lucky with his stake in Alibaba Group Holding Ltd.