Slide 1: Annual Results 2020
Annual Results 2020 Swiss Re investor and analyst presentation Zurich, 19 February 2021 Annual Results 2020 1
Slide 2: Focus areas of Annual Results 2020
Focus areas of Annual Results 2020 Earnings in P&C pricing Capital Leadership in context update actions sustainability Annual Results 2020 2
Slide 3: Swiss Re delivered solid full-year 2020 results excluding COVID-19 impact
Swiss Re delivered solid full-year 2020 results excluding COVID-19 impact USD USD USD 2.2bn -3.9bn -0.9bn Net income (pre-tax) Net income excluding COVID-191 COVID-19 impact reported 1 Excludes losses related to COVID-19 and the associated estimated tax impacts Annual Results 2020 3
Slide 4: The majority of COVID-19 losses were incurred in the second and fourth quarters
The majority of COVID-19 losses were incurred in the second and fourth quarters, largely driven by business closings and excess mortality Business closings in Europe1 (number of countries) 30 Key drivers in 2020 25 20 • Event cancellation: most events with large number of participants were 15 cancel
Slide 5: Swiss Re's reported US GAAP COVID-19 losses continue to reflect high levels of IBNR
Swiss Re’s reported US GAAP COVID-19 losses continue to reflect high levels of IBNR Swiss Re’s reported COVID-19 losses in FY 2020 (USD m, pre-tax) 503 3 879 3 879 IBNR Paid & case reserves 912 24% Q4 251 59% 11% Q3 1 398 53% Q2 815 41% 12% Q1 Event cancellation Business interruption Credit & surety
Slide 6: Remaining COVID-19 losses are estimated at USD <0.5bn in 2021
Remaining COVID-19 losses are estimated at USD <0.5bn across P&C Reinsurance and Corporate Solutions in 2021 Pre-tax US GAAP Best estimate of pre-tax losses booked in US GAAP losses1 in FY 2020 (USD) FY 2021 (USD) • Corporate Solutions has limited exposure in 2021 as book is in run-off Event cancell
Slide 7: Both P&C businesses achieved a strong underlying performance
Both P&C businesses achieved a strong underlying performance on the back of improving market conditions and management actions taken P&C Reinsurance Corporate Solutions 104% 112% Normalised combined ratio1 Normalised combined ratio1 108% assuming normalised 100% man-made losses 104% 100% 96% 96% 92%
Slide 8: The Group generated strong investment results
The Group generated strong investment results, supported by a high- quality portfolio and proactive steering <50% USD 27m 70% exposure to fallen angels vs market impairments fixed income unrealised gains with maturity >10 years 3.5% Return on investments Significant unrealised gains on Proactive por
Slide 9: Swiss Re is well positioned to benefit from improved market conditions
Swiss Re is well positioned to benefit from improved market conditions FY 2020 FY 2020 2021 as reported excl. COVID-19 outlook P&C -2.8% 13.2% Estimated combined ratio1 of <95% for 2021, supported by improved portfolio mix and positive pricing developments Reinsurance Return on equity Return on equi
Slide 10: Swiss Re prioritised margins over volumes in the January renewals
Swiss Re prioritised margins over volumes in the January renewals, focusing on the implementation of key underwriting priorities Tighter terms & Continued de-risking of Lower exposure to conditions casualty exposures frequency events USD >98% 55% >500m of exposed property treaty contracts lower expo
Slide 11: Swiss Re achieved attractive price increases in the January renewals
Swiss Re achieved attractive price increases in the January renewals Nominal price change +6.5% • 46% of Swiss Re’s reinsurance Higher loss assumptions -1.5% treaty business renewed in USD bn Lower interest rates -3.5% January Premium change -11% • 5.3% price increases in 8.8 proportional business a
Slide 12: The January renewals outcome reflects a disciplined focus on technical underwriting quality
The January renewals outcome reflects a disciplined focus on technical underwriting quality Gross premium volume by line of business1 (USD bn) Gross premium volume by region1 (USD bn) Up for Premium Estimated Price Up for Premium Estimated renewal Jan change outcome Jan change3 renewal Jan change ou
Slide 13: Premium volume change in January renewals
Premium volume change in January renewals Estimated outcome in 2021 vs 2020 (USD)1 Volume • Focus on underwriting margins was increased given the increase low yield environment • Volume reductions in casualty and in proportional property were driven by active cancellations or Volume reductions of lo
Slide 14: Corporate Solutions continues to benefit from strong pricing trends
Corporate Solutions continues to benefit from strong pricing trends and rebalancing of portfolio Corporate Solutions achieved significant price increases Targeted pruning actions and selected focus areas Compound price quality change (%) Gross premiums written 15 Total Corporate Solutions price qual
Slide 15: Swiss Re proposes a stable dividend
Swiss Re proposes a stable dividend, even in these unprecedented times Swiss Re’s capital management priorities remain unchanged CHF 5.90 regular dividend per share CHF per share, year paid Priority I Priority II 5.90 5.90 5.60 Ensure superior capitalisation Grow the regular dividend 4.85 5.00 at al
Slide 16: Swiss Re continues to drive sustainability leadership
Swiss Re continues to drive sustainability leadership in re/insurance and decarbonise its business activities Key highlights in 2020 External recognition Sustainable • Committed to fully decarbonise our re/insurance business by 2050 underwriting • New policies exclude support to most carbon intensiv
Slide 17: Financial highlights
Financial highlights Annual Results 2020 17
Slide 18: Key figures
Key figures Corporate Total Total USD m, unless otherwise stated P&C Re L&H Re Solutions Life Capital Group items FY 2020 FY 2019 • Premiums earned and fee income 20 832 13 883 4 047 1 984 24 40 770 38 594 • Net income/loss - 247 71 - 350 - 265 - 87 - 878 727 • Return on investments 3.0% 3.7% 2.6% 3
Slide 19: P&C Reinsurance
P&C Reinsurance Results impacted by COVID-19 and other large losses but underlying performance strong Annual Results 2020 19
Slide 20: P&C Reinsurance results were impacted by COVID-19 and other large losses
P&C Reinsurance results were impacted by COVID-19 and other large losses, while the underlying performance was strong Net premiums earned Net operating margin1 (%) Combined ratio (%) 111.5 107.8 109.0 104.0 -3.7pts 99.8 3.8 93.5 excl. COVID-19 0.1 USD 20.8bn 83.7 85.7 10.7 8.2 2014 2015 2016 2017 20
Slide 21: P&C Reinsurance strategy in action
P&C Reinsurance strategy in action Portfolio split by region and line of business CORE • Efficiency gains across the value chain (% of net premiums earned) US GAAP cost ratio1(%) through services tailored towards client 35 33.0 needs combined with smart & lean 32.5 31.8 processes 31.1 30.3 • Continu
Slide 22: L&H Reinsurance
L&H Reinsurance Solid underlying performance supported by strong investment result Annual Results 2020 22
Slide 23: L&H Reinsurance achieved a solid underlying performance
L&H Reinsurance achieved a solid underlying performance Net premiums earned Net operating margin1 (%) Running yield and ROI (%) 3.8 3.5 3.4 3.3 3.4 3.3 3.0 -7.1pts 10.0 5.0 4.3 2.7 3.4 3.6 3.7 3.7 USD 13.7bn 3.2 2.9 in 2020 12.3 2014 2015 2016 2017 2018 2019 2020 10.2 Running yield ROI USD 12.8bn in
Slide 24: L&H Reinsurance strategy in action
L&H Reinsurance strategy in action Portfolio split by region and line of business CORE (% of net premiums earned) US GAAP cost ratio 1 (%) • Active cost management, scalability and 35 growth will further improve our cost ratios 30 23.5 23.5 • Continuous reallocation of resources to key 25 21.8 20.9
Slide 25: Corporate Solutions
Corporate Solutions Turnaround ahead of plan Annual Results 2020 25
Slide 26: Corporate Solutions turnaround is ahead of plan
Corporate Solutions turnaround is ahead of plan Net premiums earned Net operating margin1 (%) Combined ratio (%) 133.4 127.9 117.5 116.5 +6.2pts 101.1 93.0 93.2 USD 4.0bn 8.7 93.2 5.1 excl. COVID-19 0.5 -8.1 2014 2015 2016 2017 2018 2019 2020 in 2020 -16.1 • FY 2020 large nat cat events 0.1%pts abov
Slide 27: Corporate Solutions strategic transformation in action
Corporate Solutions strategic transformation in action Portfolio split by region and line of business Reserving adequacy restored (% of net earned premium) Net prior-year reserve development (as % of premiums) 4% • Reinforced portfolio steering framework -1% across costing, underwriting, reserving a
Slide 28: Life Capital
Life Capital Successful closing of ReAssure sale and strong growth in iptiQ Annual Results 2020 28
Slide 29: Life Capital's result reflects ongoing investments into the open books
Life Capital’s result reflects ongoing investments into the open books Net income Dividend remitted Open books - Gross premiums written (USD m) to Swiss Re Group 2 171 USD -265m USD 1.5bn CAGR ~25% 1 790 1 567 in 2020 in 2020 1 197 1 039 1 099 868 1 066 USD -177m in 2019 USD 0.5bn in 2019 577 651 50
Slide 30: iptiQ growth metrics
Gross premiums written (USD m) In-force policy count (thousands) Gross income1 (USD m) # of distribution partners +76% +77% +311% 40 371 668 37 at YE 2020 211 377 9 29 at YE 2019 2019 2020 2019 2020 2019 2020 Increase in GPW by USD 160m Policy count increased iptiQ earns technical profits on iptiQ i
Slide 31: Group investments
Group investments Strong investment result despite unprecedented market volatility Annual Results 2020 31
Slide 32: Strong investment result despite unprecedented market volatility
Strong investment result despite unprecedented market volatility Return on investments (ROI) Investment portfolio positioning (USD bn) Net investment income (USD m, LHS) Running yield (%, RHS) 140 133.4 3.3 14.5 122.4 3.0 120 2.9 2.9 2.9 109.9 2.8 21.6 3.5% 100 13.3 2.4 54.4 3 567 3 386 3 396 80 47.
Slide 33: Investment portfolio is well positioned to deliver sustainable returns
Investment portfolio is well positioned to deliver sustainable returns Fixed income maturities and unrealised gains (USD bn)1 36.5 Market value: USD 82.2bn Unrealised gains: USD 7.2bn 5.0 • 70% of fixed income unrealised gains in higher-yielding securities with 22.6 >10 years to maturity • Portfolio
Slide 34: Appendix
Appendix Annual Results 2020 34
Slide 35: Business segment results FY 2020 - Income statement
Business segment results FY 2020 Income statement Corporate Total Total USD m Reinsurance P&C Re L&H Re Solutions Life Capital Group items Consolidation FY 2020 FY 2019 Revenues Gross premiums written 36 579 21 512 15 067 4 839 2 533 24 -1 024 42 951 42 228 Net premiums written 34 293 20 636 13 657
Slide 36: Business segment results FY 2020 - Balance sheet
Business segment results FY 2020 Balance sheet Corporate End End 31 December 2020, USD m Reinsurance P&C Re L&H Re Solutions Life Capital Group items Consolidation FY 2020 FY 2019 Assets Fixed income securities 72 649 39 691 32 958 7 024 3 244 101 - 83 018 81 573 Equity securities 2 159 1 518 641 20
Slide 37: Total equity and ROE FY 2020
Total equity and ROE FY 2020 Corporate Total USD m Reinsurance P&C Re L&H Re Solutions Life Capital Group items FY 2020 Shareholders' equity at 31 December 2019 16 571 8 318 8 253 2 005 5 289 5 386 29 251 Net income attributable to shareholders - 176 - 247 71 - 350 - 265 - 87 - 878 Dividends and sha
Slide 38: Change in shareholders' equity
Change in shareholders' equity mainly driven by the sale of ReAssure, dividend payments and net loss, partially offset by unrealised gains USD m Gov bonds 1.9 Corp bonds 1.5 Tax -0.7 Dividends -1.8 Share buyback -0.2 57 29 251 - 878 - 2 080 2 741 - 1 956 27 135 2 3 Shareholders' Net income Dividends
Slide 39: Swiss Re's large loss experience over time
Swiss Re's large loss experience over time Swiss Re’s reported large nat cat and man-made losses1 (USD bn, pre-tax) 7 6 COVID-19 L&H Hurricanes Harvey, Irma, Maria 5 Japan and New Zealand 4 earthquakes, Thailand flood COVID-19 P&C Typhoon Jebi, Camp Fire Typhoons 3 Hagibis, Faxai 2 Hurricane Sandy V
Slide 40: P&C underwriting result
P&C underwriting result P&C Reinsurance and Corporate Solutions Combined ratio Main drivers of change Net premiums Underwriting earned result P&C Reinsurance FY 2020 FY 2020 FY 2020 FY 2019 FY 2020 ex COVID-19 USD m USD m Property 101.3% 109.4% 92.0% • Impacted by business interruption and event can
Slide 41: P&C Reinsurance combined ratio split
P&C Reinsurance combined ratio split Combined ratio split (%) 107.8 109.0 110 2.0 9.2 Key developments in 2020 100 10.1 2.1 3.5 8.1 • Normalised combined ratio1 improved to 96.9% from 98.4%2 last year 90 6.2 1.5 5.8 reflecting price increases, portfolio actions and a shift from long tail to short 80
Slide 42: Corporate Solutions combined ratio split
Corporate Solutions combined ratio split Combined ratio split (%) 127.9 116.5 130 8.4 120 1.4 Key developments in 2020 110 16.1 23.3 • Large nat cat loss impact of USD 216m (vs USD 210m expected) 100 2.0 90 18.9 5.3 • Large man-made losses of USD 80m (vs USD 271m expected) 80 17.0 15.4 • Favourable
Slide 43: Corporate Solutions normalised combined ratio development
Corporate Solutions normalised combined ratio development ~4%pts ~8%pts 110% ~12%pts ~2%pts ~5%pts 97% <97% ~2%pts FY 2018 Assumption Portfolio pruning Rate increases Net expense Adjusted Man-made 2020 FY 2021 target (normalised1) revisions savings reinsurance claims activity (normalised1) (normalis
Slide 44: L&H Reinsurance EBIT movements
L&H Reinsurance EBIT movements EBIT movements (USD m) FY 2019 FY 2020 Life Health L&H Life Health L&H EBIT reported 581 258 1 4913 -168 221 4563 Net operating margin, % 6.0 5.8 10.0 -1.6 4.6 2.9 Mortality/morbidity experience vs expected1 133 -78 55 54 -156 -102 Valuation/assumption changes2 -127 -7
Slide 45: Return on investments (ROI)
Return on investments (ROI) Corporate Group Consoli- Total Total USD m P&C Re L&H Re Solutions Life Capital items dation FY 2020 FY 20192 Investment related net investment income 1 043 1 039 154 113 20 -317 2 052 3 567 Fixed income 656 981 154 87 7 - 1 885 2 849 Equities and alternative investments
Slide 46: Overall investment portfolio
Overall investment portfolio Other investments (incl. policy loans) Cash and cash equivalents Mortgages and other loans 7% 4% Short-term investments 3% 13% Equities 7% Credit bonds 27% 39% Government bonds Corporate Life End End USD bn P&C Re L&H Re Solutions Capital Group items Consolidation FY 202
Slide 47: Fixed income securities
Fixed income securities Government Credit USD m bonds bonds End FY 2019 (ReAssure included) 56 399 45 624 End FY 2020 vs End FY 2019 (ReAssure excluded) End FY 2019 (ReAssure excluded) 50 995 30 578 • Decrease in government bonds driven by net sales, End partially offset by market value gains stemmi
Slide 48: Equities and alternative investments
Equities and alternative investments Equity securities by sector 2% 1% Non-Cyclical consumer goods 3% 4% Financials End End 4% Information technology USD m FY 20191 FY 2020 20% Cyclical services 6% ETF, excl. fixed income Equity securities 2 599 2 472 General industrials 11% Basic industries Private
Slide 49: Overview of proposed capital management actions
Overview of proposed capital management actions • The Board of Directors will propose to the AGM 2021: − Regular dividend of CHF 5.90 per share − Renewal of existing authorised capital (up to 85 million shares); new proposed expiry date AGM 2023 − Number of shares that can be issued prior to the 202
Slide 50: Sensitivities
Sensitivities (USD bn, pre-tax) Change in market values (Equities and alternative investments, excl. real estate) -25% -10% +25% Estimated impact on shareholders' equity -1.9 -0.8 +2.0 Estimated impact on economic net worth (EVM) -1.9 -0.8 +2.0 Estimated impact on income/loss before income tax expen
Slide 51: Premiums by country
Premiums by country 2020 Gross premiums written and fees assessed against policyholders by country1 (USD m) Total Total Life & Health Non-Life FY 2020 FY 2019 United States 6 447 12 050 18 497 17 857 United Kingdom 2 125 1 809 3 934 3 880 China 768 1 075 1 843 2 360 Australia 891 917 1 808 2 054 Jap
Slide 52: Premiums by region
Premiums by region Swiss Re Group net premiums earned1 2020: USD 40.8bn USD 19.5bn USD 12.9bn USD 8.4bn Americas EMEA Asia 48% 32% 20% of which HGMs: ~2% ~3% ~10% ≈16% HGMs incl. PI2: ~2% ~3% ~14% ≈20% 1 Includes fee income from policyholders; does not reflect the exposure to HGMs through Principal
Slide 53: Premiums by line of business and region
Premiums by line of business and region Premiums earned and fee income by line of business (USD bn) 22.2 25.4 28.8 31.3 30.2 33.2 33.7 34.5 38.6 40.8 11% 12% 12% 13% 13% 12% 12% 14% 14% 14% 35% 30% 27% 26% 26% 26% 27% 28% 26% 25% 11% 11% 12% 10% 10% 10% 11% 11% 10% 12% 21% 22% 24% 25% 28% 29% 28% 26
Slide 54: Corporate calendar and contacts
Corporate calendar and contacts Corporate calendar 2021 18 March Publication of Annual Report 2020 Conference call 16 April 157th Annual General Meeting Zurich (virtual) 30 April Q1 2021 Key Financial Data Conference call 30 July H1 2021 Results Conference call 29 October 9M 2021 Key Financial Data
Slide 55: Annual Results 2020
(in) Swiss Re Annual Results 2020 85
Slide 56: Forward-looking statements disclaimer
Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets, and trends) and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to
Slide 57: Copyright and usage notice
©2021 Swiss Re. All rights reserved. You may use this presentation for private or internal purposes but note that any copyright or other proprietary notices must not be removed. You are not permitted to create any modifications or derivative works of this presentation, or to use it for commercial or