Slide 1: Second quarter 2015 results
Second quarter 2015 results Analyst and investor presentation Zurich, 30 July 2015
Slide 2: Today's agenda
Today’s agenda • Business performance David Cole, Group CFO • Business update and priorities Michel M. Liès, Group CEO Second quarter 2015 results 2
Slide 3: Business performance
Business performance David Cole, Group CFO Second quarter 2015 results 3
Slide 4: All Business Units contributed to Swiss Re's solid Q2 2015 results
All Business Units contributed to Swiss Re's solid Q2 2015 results • Swiss Re reports second quarter net income of USD 820m, continuing our track record of good underwriting and investment results; ROE of 9.5% • P&C Reinsurance delivers a solid underwriting result, with net income of USD 453m; ROE o
Slide 5: Key figures
Key figures Corporate Admin Group Total Total Total USD m, unless otherwise stated P&C Re L&H Re Solutions Re® items Q2 2015 Q2 2014 H1 2015 • Premiums earned and fee income 3 503 2 628 843 170 - 7 144 7 560 14 706 • Net income/loss 453 218 72 43 34 820 802 2 260 • Return on investments 4.1% 3.9% 3.
Slide 6: Underwriting and investment performance remain both strong and stable
Underwriting and investment performance remain both strong and stable 130% 5% 120% 4% 110% 114.1 101.1 98.2 98.3 97.3 100% 93.9 104.7 95.4 92.9 91.3 3% 104.0 89.7 90% 98.4 98.4 97.9 97.4 96.8 90.2 93.7 2% 80% 90.4 85.7 89.4 83.1 85.4 1% 70% 60% 0% 1 Avg 5-year US Treasury risk-free rate (RHS) Group
Slide 7: P&C Reinsurance reports a solid underwriting result
P&C Reinsurance reports a solid underwriting result Net premiums earned Combined ratio Net income USD m % USD m H1 Q2 7 373 7 270 Q1 93.5% 93.3% 1 543 ROE: 20.0% 3 560 (H1: 86.1%) (H1: 88.7%) 1 261 3 503 553 ROE: 453 13.9% 3 813 3 767 990 808 2014 2015 2014 2015 2014 2015 • At constant fx rates prem
Slide 8: L&H Reinsurance performance remains on track
L&H Reinsurance performance remains on track Premiums earned and fees Operating margin Net income USD m % USD m H1 Q2 5 567 11.0% ROE: 5 320 (H1: 10.3%) 16.6% Q1 495 ROE: 2 895 2 628 7.1% 218 14.0% (H1: 8.6%) 112 2 672 2 692 277 48 2014 2015 2014 2015 2014 64 2015 • At constant fx rates premium • Ma
Slide 9: Corporate Solutions delivers profitable results
Corporate Solutions delivers profitable results Net premiums earned Combined ratio Net income USD m % USD m H1 Q2 Q1 1 671 1 725 93.2% ROE: 239 20.8% (H1: 94.2%) ROE: 841 843 97.3% 146 72 12.7% (H1: 92.4%) 66 830 882 167 2014 2015 2014 2015 2014 80 2015 • Stable top line due to the • No impact from
Slide 10: Admin Re up-streams substantial dividend to the Group
Admin Re® up-streams substantial dividend to the Group Gross cash generation Return on investments Net income USD m % USD m H1 ROE: Q2 473 8.3% Q1 4.7% 4.6% 249 ROE: (H1: 4.8%) (H1: 5.0%) 43 2.8% 271 165 139 117 206 202 87 2014 52 2015 2014 2015 2014 48 2015 • Q2 2015 GCG is in line with • Q2 2015 R
Slide 11: Group investment portfolio produces a strong result
Group investment portfolio produces a strong result Average invested assets Return on investments Total return USD bn, basis for ROI calculation % % H1 Q2 8.4% (H1: 8.1%) 114.2 110.3 4.1% 4.2% (H1: 3.9%) (H1: 4.0%) -10.4% (H1: -0.2%) 113.7 108.6 2014 2015 2014 2015 2014 2015 • Decrease in average in
Slide 12: Decrease in common shareholders' equity driven by external dividends and unrealised losses
Decrease in common shareholders' equity driven by external dividends and unrealised losses USD m Gov bonds -2.2 Corp bonds -1.6 Sec products -0.1 Equities and others -0.1 Tax 1.2 820 Total -2.8 36 578 - 2 608 - 2 779 190 32 201 Common shareholders' Net income Dividends Net change in Other 2 Common s
Slide 13: Business update and priorities
Business update and priorities Michel M. Liès, Group CEO Second quarter 2015 results 13
Slide 14: Price quality remains attractive following July renewals
Price quality remains attractive following July renewals January 2015 treaty renewals1 -1% USD 8.8bn USD 8.7bn YTD 2015 renewals (January – July) Up for renewal Estimated Treaty portfolio volume 1 Jan 2015 outcome +8% April 2015 treaty renewals1 +21% USD 13.8bn USD 1.7bn USD 12.8bn USD 1.4bn Up for
Slide 15: Economic growth and wealth are the most important drivers for insurance market growth
Economic growth and wealth are the most important drivers for insurance market growth Premiums as a % of GDP United States • Swiss Re’s developed insurance “S-Curve” 4% Switzerland Canada illustrates the various Germany stages of insurance Venezuela penetration France 3% • Insurance Spain South Afri
Slide 16: Swiss Re Global Partnerships enables the Group to broaden our client base
Swiss Re Global Partnerships enables the Group to broaden our client base and address the protection gap Florida • First dedicated Hurricane risk public sector team Caribbean Turkey Bangladesh in the reinsurance Hurricane, Earthquake pool Flood Beijing insurance industry earthquake and Agricultural
Slide 17: Update on priorities for the Group in 2015
Update on priorities for the Group in 2015 • Systematically allocate capital to risk pools / revenue streams that meet our strategic and financial targets Group • Broaden and diversify client base to increase access to risk • Continue to shift capital and talent to High Growth Markets • Emphasise di
Slide 18: On track to meet our 2011-2015 Group financial targets
On track to meet our 2011-2015 Group financial targets ROE 700 bps above risk free average over 5 EPS 10% average annual growth rate, years (2011-2015) adjusted for special dividends1 in % in USD2 13.0 13.7 13.5 11.9 13.4 10.2 10.5 9.2 9.6 7.7 9.2 6.6 8.8 6.6 8.0 8.4 8.5 8.6 8.5 7.3 7.8 8.2 4.6 2010
Slide 19: Appendix
Appendix • Business segment results Q2 2015 – Income statement • Business segment results Q2 2015 – Balance sheet • Total equity and ROE Q2 2015 • P&C Reinsurance – Underwriting performance • P&C Reinsurance: 2015 renewals • Corporate Solutions – Underwriting performance • Return on investments (ROI
Slide 20: Business segment results Q2 2015 – Income statement
Business segment results Q2 2015 Income statement Re- Corporate Admin Group Consoli- Total Total Total USD m insurance P&C Re L&H Re Solutions Re® items dation Q2 2015 Q2 2014 H1 2015 Revenues Premiums earned 6 119 3 503 2 616 843 91 - - 7 053 7 432 14 466 Fee income from policyholders 12 - 12 - 79
Slide 21: Business segment results Q2 2015 – Balance sheet
Business segment results Q2 2015 Balance sheet Re- Corporate Admin Group Consoli- End End 30 June 2015, USD m insurance P&C Re L&H Re Solutions Re® items dation Q2 2015 Q1 2015 Assets Fixed income securities 62 481 32 708 29 773 5 737 16 629 24 - 84 871 89 316 Equity securities 3 175 2 197 978 955 -
Slide 22: Total equity and ROE Q2 2015
Total equity and ROE Q2 2015 Re- Corporate Admin Group Total1 Total1 USD m insurance P&C Re L&H Re Solutions Re® items Q2 2015 H1 2015 Common shareholders' equity2 at 31 December 2014 20 025 13 859 6 166 2 334 6 388 6 085 34 828 Common shareholders' equity2 at 31 March 2015 21 383 14 653 6 730 2 266
Slide 23: P&C Reinsurance: Underwriting performance
P&C Reinsurance Underwriting performance Combined ratios in %, premiums and underwriting result in USD m Net Under- Q2 Q2 premiums writing H1 2014 2015 Main drivers of change earned result 2015 Property 90.9% 85.5% • Improvement mainly due to higher reserve 1 299 188 78.9% releases and better natura
Slide 24: P&C Reinsurance: 2015 renewals
P&C Reinsurance: 2015 renewals Portfolio weighting by line of business and region Gross premium volume, treaty portfolio Up for renewal YTD Estimated outcome YTD By line of business 10% 11% Casualty 21% 41% 23% 40% Nat Cat Property 1 1 Specialty 28% 26% By region 30% 31% 41% 38% EMEA Americas Asia 2
Slide 25: Corporate Solutions: Underwriting performance
Corporate Solutions Underwriting performance Combined ratios in %, premiums and underwriting result in USD m Net Under- Q2 Q2 premiums writing 2014 2015 Main drivers of change earned result Property 84.5% 80.5% • No major natural catastrophe loss in either 334 65 period Casualty 116.4% 109.6% • Q2 2
Slide 26: Return on investments (ROI)
Return on investments (ROI) Corporate Admin Group Consoli- Total Total Total USD m P&C Re L&H Re Solutions Re® items dation Q2 2015 Q2 2014 H1 2015 Investment related net investment income 260 281 37 162 49 1 790 904 1 518 Fixed income 181 259 32 153 - - 625 715 1 273 Equities and alternative invest
Slide 27: Overall investment portfolio
Overall investment portfolio Mortgages Other incl. Cash and and other policy loans cash loans 6% equivalents Short-term End Equities 3% 5% investments USD bn Q2 2015 7% 8% Balance sheet values 145.1 Securitised products Unit-linked investments -22.6 5% With-profit business -3.3 Government bonds Asse
Slide 28: Fixed income securities
Fixed income securities Government Credit • Decrease in government USD m bonds bonds bonds reflects mark-to-market End Q1 2015 50 812 38 504 losses arising from increases End in interest rates, partially Q2 2015 48 956 35 915 offset by net purchases • Credit bonds include corporate bonds (USD 30.2bn
Slide 29: Equities and alternative investments
Equities and alternative investments Listed Equities Exchange-traded funds by sector Non-Cyclical Consumer Goods Equities Information Technology End End 3% 2% 1% 3% Financials USD m Q1 2015 Q2 2015 5% 7% 32% Cyclical Services Listed Equities1 4 202 3 995 General Industrials Private Equity1 1 638 1 6
Slide 30: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 2015 29 October Third Quarter 2015 Results Conference call 8 December Investors' Day Rüschlikon 2016 23 February Annual Results 2015 Conference call 16 March Publication of Annual Report 2015 and EVM 2015 22 April 152nd Annual General Meeting Zurich I
Slide 31: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements 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 an