Peter Hsu

Bär & Karrer Ltd

Zurich www.baerkarrer.ch

peter.hsu@baerkarrer.ch Tel: +41 58 261 53 94

Biography

Peter Hsu is Bär & Karrer’s head of insurance and a key contact for the banking and insurance practice. His practice focuses on insurance, banking, fintech and financing. He regularly advises Swiss and foreign insurers, reinsurers, banks, securities firms and other financial intermediaries, as well as fintech and insurtech businesses, with regard to regulatory and M&A/corporate law matters. Moreover, he is often involved in complex financing transactions where he represents either lenders or borrowers. Further, he advises clients on M&A transactions in other industries.

Looking back over your career, what is the most interesting case you have been a part of?

An exciting project has been the voluntary reorganisation of a reinsurance group with a listed parent company. This project involved a full range of business, legal and regulatory topics including (re-)insurance regulatory, corporate/corporate governance, merger law, insurance contractual, general contractual, IP and tax queries. Together with the business and more than a dozen work streams of various disciplines in a project team, we shaped a suitable target operating model, elaborated and implemented sensible transaction structures in a cross-border context. It was a very rewarding experience for us as external counsel to act as one team together with the client and the other advisers over a time period of many months.

How has the market changed since you first started practising?

For several years, low interest rates were a challenge for insurers, in particular for life insurers. Furthermore, (re-)insurers have been challenged by stiff competition, a soft market and shrinking margins. Increased losses often cannot simply be compensated by an increase of the premiums. However, in general, the market participants have mastered those challenges very well and Swiss (re-)insurers overall provide for a very robust solvency ratio. New distribution channels require changes but create new opportunities for (re-)insurers as well.

Furthermore, (re-)insurers have been facing an increased regulatory burden, including e.g. cross-border restrictions that are difficult to navigate. The importance of the Swiss Financial Market Supervisory Authority FINMA’s role as a supervisory authority has increased as FINMA developed its practice and sharpened its mandate in the insurance sector over time, in particular to protect creditors, investors and insured persons, as well as to safeguard the functioning of the Swiss financial marketplace and to foster its reputation, competitiveness and sustainability. In performing this mandate, it makes use of its supervisory powers and instruments, including, for example, on-site inspections, (informal) intensive supervision as well as enforcement procedures, and may impose regulatory sanctions. Against this background, legal and regulatory compliance has become even more of a focus for financial institutions and insurers in particular. In this context, clients appreciate guidance from a trusted advisor. Similarly, a business-oriented approach and specific industry knowledge help to create value for the client in M&A transactions.

In what ways has covid-19 impacted your clients and your practice, and what future issues do you see on the horizon caused by the pandemic?

Covid-19 impacted distribution channels of insurance undertakings as physical meetings were no longer possible on the sales front. As a consequence (among other reasons), distribution through electronic means has become even more important.

Further, in the area of business interruption, travel insurance, etc., exclusions for pandemic-related losses have become a hot topic. In some areas, covid-19 reduced (potential) losses, e.g., because people had to stay and work at home resulting e.g. in fewer miles being driven in cars (car insurance), fewer accidents (accident insurance), fewer covid-19-unrelated visits of medical doctors and fewer surgeries (medical insurance).

So far, it seems that the insurance sector in Switzerland managed the covid-19 crisis well. Insurers and their employees have coped very well with working from home arrangements, including continued good teamwork and successful real-life stress tests for reliable IT infrastructure. We would expect that working from home at least partially might become a better accepted working model in the future.

Similarly, our practice has continued to be very active. Pre-existing M&A and enforcement proceedings work continued at large. The number of new deals slowed down for a short period only. Furthermore, clients sought for advice in covid-19related matters.

What qualities make for an effective insurance specialist?

Be interested in what your client is doing and aiming for, know your client’s business, be open for new ideas and think “out-of-thebox”, anticipate potential future developments, enable your client to create value – be a trusted adviser to your client.

How does Bär & Karrer distinguish itself from competitors in the market?

We focus on our client’s business and goals and elaborate business-oriented and efficient solutions to create value for our clients. Joint teamwork throughout the firm, including all practice groups and all levels of seniority enables us to achieve best results. Having offices in all language regions in Switzerland and a longstanding network of corresponding law firms on a non-exclusive basis in many jurisdictions, we are local as well as international and offer our clients a one-stop-shop solution.

Where, in your opinion, does the future of the practice area lie?

Market consolidation and restructuring of large run-off portfolios might result in increased M&A activity. We might as well see more complex voluntary group restructuring activities. Furthermore, insurers might want to assure new distribution channels by way of joint ventures or acquisitions. In addition, insurtech will further develop. Moreover, the increased regulatory burden, including, for example, cross-border restrictions and supervisory bodies further developing their role and mandate call for provident legal and regulatory responses.

What is the best piece of advice you have ever received?

Be open minded, listen and look what your client's needs and wishes are, enable your client to do his or her business, create value for your client.

You have enjoyed a very distinguished career so far. What would you like to achieve that you have not yet accomplished?

Making people outside the practice and the industry, including in particular the young generation, aware of how exciting the practice area and industry sector of insurance and reinsurance is.