Swiss Re Ag · SIX:SREN
Swiss Re — UBS Alpine Summit 2005
17 slides from Swiss Re's conference presentation, Jan 21, 2005
Slide 1: UBS Alpine Summit
ab UBS Alpine Summit John R. Coomber Chief Executive Officer Gstaad, 21 January 2005 Cautionary note on ab forward-looking statements Certain statements contained herein are forward-looking. These statements provide current expectations of future events based on certain assumptions and include any s
Slide 2: Legend
ab Legend This presentation does not constitute an offer of securities for sale into the United States. The offer and sale of securities discussed in this presentation were made by means of a confidential private placement memorandum distributed to qualified offerees. The securities referred to in t
Slide 3: Swiss Re at a glance
ab Swiss Re at a glance Leading reinsurer with a truly global business Founded in 1863 and developed into one of the world’s largest and globally active multi-line reinsurer Wholesale manager of capital and risk focused on reinsurance and related trading activities Strong financial position in
Slide 4: Our expectations for the (re)insurance industry in 10 years time (I)
ab Agenda Introduction Swiss Re’s strategic priorities Conclusions UBS Alpine Summit Gstaad, 21.01.2005 Slide 7 ab Our expectations for the (re)insurance industry in 10 years time (I) Retail and wholesale risk transfer markets continue to show growth above GDP, say 6% p.a. nominal; world ins
Slide 5: Our expectations for the (re)insurance industry in 10 years time (II)
ab Our expectations for the (re)insurance industry in 10 years time (II) Low investment return environment partly due to demographic factors Securitisation of insurance risk increasingly established. Annual issuances reaching 5% of worldwide insurance premium (0.1% in 2003) Scarcity of high qu
Slide 6: The pre-requisites for effective cycle management are in place
The pre-requisites for effective ab cycle management are in place An organisational structure which separates product pricing from the selling function Consistent benchmarks for cycle reference premium and renewal target premium and uniformity in pricing tools A clear understanding of each pro
Slide 7: Renewals 2005: Industry perspective
ab Renewals 2005: Industry perspective Underwriting conditions remain attractive, with the large reinsurers maintaining pricing discipline Overall: – Capacity more than adequate – More secure capacity and risk concentration are key themes in this renewal – Client retentions continue to increase
Slide 8: Risk is a growth business: Reinsurance outpaced insurance and GDP growth
ab Swiss Re’s strategic priorities I. Actively manage the cycle for profits II. Optimise organic and transactional growth Excellence III. Extend leadership in Asia in execution IV. Accelerate the balance sheet through risk securitisation UBS Alpine Summit Gstaad, 21.01.2005 Slide 15 Risk is a growth
Slide 9: Swiss Re's deal track record: Numerous deals in all areas
ab Swiss Re’s deal track record: Numerous deals in all areas Disposals Acquisitions 1994 Lloyd Adriatico 1995 Alhermij Group 1994 Elvia Group 1996 M&G Re 1994 Vereinte/Magdeburger 1996 Uniorias 1994 SCHWEIZ Seguros 1998 NCM Holding 1994 SCHWEIZ Italia 1998 Falcon Asset Management 1994 La Equitativa
Slide 10: Insurance and economic developments are linked
Insurance and economic ab developments are linked Economic development / increasing income Young population Ageing population New start-ups Large conglomerates Emergence of a United States middle-income FDI/capital outflow Reform of old (state- class owned) companies Increasing home/ car Increasing
Slide 11: Use ILS to increase velocity of Swiss Re's balance sheet and improve RoE
ab Swiss Re’s strategic priorities I. Actively manage the cycle for profits II. Optimise organic and transactional growth Excellence III. Extend leadership in Asia in execution IV. Accelerate the balance sheet through risk securitisation UBS Alpine Summit Gstaad, 21.01.2005 Slide 21 Use ILS to incre
Slide 12: A new innovative transaction just closed
A new innovative transaction ab just closed On 20 January 2005 Swiss Re successfully completed a USD 245m securitisation of future life profits Transaction was well received Significant step forward in Swiss Re’s strategy to accelerate the balance sheet through securitisation by transferring i
Slide 13: Recovery of acquisition costs of USD 153m, deferred gain of USD 57m
Recovery of acquisition costs of ab USD 153m, deferred gain of USD 57m Transaction represents a recovery of acquisition costs of USD 153m and a gain of USD 57m – The gain is deferred and recognised in the income statement over the life of the cash flows estimated to be 11 years Selling future pr
Slide 14: Conclusions
ab Agenda Introduction Swiss Re’s strategic priorities Conclusions UBS Alpine Summit Gstaad, 21.01.2005 Slide 27 ab Conclusions Swiss Re has the financial strength, product knowledge and people skills to realise today’s market opportunities Non-life pricing levels remain above cycle refere
Slide 15: Upcoming events in 2005
ab Upcoming events in 2005 14 February: January 2005 non-life renewals (conference call) 17 March: Annual results 2004 (analysts’ meeting) For more information: – www.swissre.com/investorrelations UBS Alpine Summit Gstaad, 21.01.2005 – phone: +41 43 285 4444 Slide 29 ab Appendix UBS Alpine Sum
Slide 16: Swiss Re retains a 13% residual interest and a 10% quota share
Swiss Re retains a 13% residual ab interest and a 10% quota share 90% quota share of the selected blocks are subject to this transaction Of this 90% approx. 87% of the present value of available cash flow is securitised in the offering 300 Residual layer 35 Swiss Re’s interest (13%) 250 Series C
Slide 17: Profile of underlying liabilities
ab Profile of underlying liabilities 1 Attained age distribution Gender distribution 9% 3% 4% <25 14% 15% 26-35 27% 36-45 46-55 Male 56-65 Female 66-75 28% 76+ 27% 73% Weighted average age: 58 years old Years polices have been in-force Policy size distribution 3% 7% 9% 1 to 3 19% 27% 4 to 6 < USD 10