Swiss Re Ag · SIX:SREN
Swiss Re — Bellevue Meets Management Seminar 2016
36 slides from Swiss Re's conference presentation, Jan 14, 2016
Slide 1: Bellevue Meets Management Seminar – Building Competitive Edge
Bellevue Meets Management Seminar – “Building Competitive Edge" Michel M. Liès, Group CEO Zurich, 14 January 2016
Slide 2: Today's agenda
Today's agenda Swiss Re at a glance and market developments Group strategic framework Capital allocation Client base Resources and platforms Differentiation Capital allocation to deliver sustainable shareholder value Conclusion Bellevue meets management seminar | Zurich, 14 January 2016 2
Slide 3: Our well diversified business model has positioned Swiss Re as a leading player
Our well diversified business model has positioned Swiss Re as a leading player Net premiums earned1 Economic Net Worth3 by region (in USD bn) by business segment 12.2 11.3 7.8 Corporate Solutions 10% Life Capital 10% P&C Re 49% Americas Europe Asia (incl. Middle East /Africa) 39% 36% 25% L&H Re 31%
Slide 4: Delivering on the 2011-2015 financial targets remains Swiss Re's top priority
Delivering on the 2011-2015 financial targets has been and remains Swiss Re's top priority ROE 700 bps above risk free EPS 10% average annual ENW per share growth plus average over 5 years (2011- growth rate, adjusted for dividends 10% avg. annual 2015) special dividends1 growth rate over 5 years 14
Slide 5: We have delivered a market leading total return to our shareholders
We have delivered a market leading total return to our shareholders Annualised total return to shareholders (2011-2015)1 Swiss Re 12% 10%2 22% Sample of reinsurers3 11% 5% 15% Sample of re/insurers4 8% 4% 12% STOXX Europe 600 Insurance 14% MSCI Index5 9% Share price development Dividend driven retur
Slide 6: Swiss Re faces various challenges and opportunities
Swiss Re faces various challenges and opportunities Industry Low margins consolidation Current Low yield, low Volatility in High growth environment; Growth Markets regulatory changes Evolution of primary Reshuffling of players with rich value chain customer insights Future Impact of New and enlargin
Slide 7: Agenda
Agenda Swiss Re at a glance and market developments Group strategic framework Capital allocation Client base Resources and platforms Differentiation Capital allocation to deliver sustainable shareholder value Conclusion Bellevue meets management seminar | Zurich, 14 January 2016 7
Slide 8: Our strategic framework will enable us to achieve our new financial targets
Our strategic framework will enable us to achieve our new financial targets • Building upon our successful strategy introduced in 2011 • Moving to the next stage of our transformation into a capital allocator • Emphasising four areas of strategic action going forward Areas of strategic action Group
Slide 9: Swiss Re's strategic framework
Swiss Re’s strategic framework I systematically allocate capital to risk pools / revenue streams II III broaden optimise and diversify client resources and base to increase platforms to support access to risk capital allocation IV emphasise differentiation Bellevue meets management seminar | Zurich,
Slide 10: Swiss Re actively manages liability and asset risk pools
I II III IV Swiss Re actively manages liability and asset risk pools Illustrative Liability risk pools P&C Reinsurance L&H Reinsurance Corporate Solutions Life Capital Mortality Longevity Health Property Casualty Specialty Asset risk pools Cash and short- term investments Government bonds Credit inv
Slide 11: We will maintain a dynamic allocation of capital under our strategic framework
I II III IV We will maintain a dynamic allocation of capital under our strategic framework Swiss Re Group view, end of year figures, USD bn 2011 2012 2013 2014 Dividends1 Dividends1 Dividends1 Dividends1 1.1 2.8 3.1 2.6 Business Business Business Business Acqui- reinvestments Acqui- reinvestments Ac
Slide 12: Swiss Re's strategic framework
Swiss Re’s strategic framework I systematically allocate capital to risk pools / revenue streams II III broaden optimise and diversify client resources and base to increase platforms to support access to risk capital allocation IV emphasise differentiation Bellevue meets management seminar | Zurich,
Slide 13: Three ways to broaden and diversify our access to risk
I II III IV Three ways to broaden and diversify our access to risk Geographies Clients Risks • Extend leadership in • Offer tailored solutions • Leverage Swiss Re’s mature markets • Access new clients knowledge and thought • Maintain market leadership • Develop innovative leadership in High approach
Slide 14: Broadening our access through profitable growth initiatives
I II III IV Broadening our access through profitable growth initiatives Reinsurance Corporate Solutions Life Capital Global insurance Large corporates Insurance companies companies Continued focus Large insurance companies Pension funds Regional and National Mid-size corporates Distribution partners
Slide 15: Swiss Re Global Partnerships enables the Group to broaden our client base
I II III IV Swiss Re Global Partnerships enables the Group to broaden our client base and address the protection gap • First dedicated Florida Caribbean United Turkey Bangladesh Kingdom public sector Hurricane risk Hurricane, Flood risk Earthquake pool Flood earthquake and team in the excess rainfal
Slide 16: Swiss Re's strategic framework
Swiss Re’s strategic framework I systematically allocate capital to risk pools / revenue streams II III broaden optimise and diversify client resources and base to increase platforms to support access to risk capital allocation IV emphasise differentiation Bellevue meets management seminar | Zurich,
Slide 17: Swiss Re optimises resources and platforms to support capital allocation
I II III IV Swiss Re optimises resources and platforms to support capital allocation Examples • Alignment of the workforce to actively support our HGM strategy (e.g. Talent increase of FTE in Latin America and Asia by 421% and 66% respectively since 2011) IT • Simplification, modernisation, and inte
Slide 18: Swiss Re has more than doubled its workforce in HGMs between 2011 and 2015
I II III IV Swiss Re has more than doubled its workforce in HGMs between 2011 and 2015 Latin America FTEs Africa FTEs Asia FTEs Jan 2011 Jun 2015 Jan 2011 Jun 2015 Jan 2011 Jun 2015 ~140 ~730 ~40 ~60 ~8601 ~1 4301 Mexico China Brazil India2 ` Indonesia HGM Targeted by Reinsurance and Corporate Solut
Slide 19: Swiss Re's strategic framework
Swiss Re’s strategic framework I systematically allocate capital to risk pools / revenue streams II III broaden optimise and diversify client resources and base to increase platforms to support access to risk capital allocation IV emphasise differentiation Bellevue meets management seminar | Zurich,
Slide 20: Active differentiation remains pivotal to extending our lead
I II III IV Active differentiation remains pivotal to extending our lead as a knowledge company and allocator of risk capital Financial Client Knowledge strength relationships company • Capital strength • Preferred partner • Thought leadership • Financial flexibility • Decade-long • Technical expert
Slide 21: Delivering distinctive thought leadership, R&D and industry dialogue
I II III IV Delivering distinctive thought leadership, R&D and industry dialogue through unique channels Distinctive thought leadership State-of-the art delivery Large and highly educated pool of talents First-class client events • 300 FTEs working on research matters • 30 FTEs in Economic Research
Slide 22: Our strategic framework will drive value creation
Our strategic framework will drive value creation Target liability Strategic asset Business portfolio allocation steering I Leadership systematically allocate capital to risk Talent & across pools / revenue streams geographies footprint II broaden III optimise Innovation and diversify resources and
Slide 23: Agenda
Agenda Swiss Re at a glance and market developments Group strategic framework Capital allocation Client base Resources and platforms Differentiation Capital allocation to deliver sustainable shareholder value Conclusion Bellevue meets management seminar | Zurich, 14 January 2016 23
Slide 24: Swiss Re's capital allocation aims to deliver sustainable shareholder value
Swiss Re’s capital allocation aims to deliver sustainable shareholder value USD 10.6bn1 distribution to shareholders Agile use of funds to deliver shareholder Usage Capital return Inorganic Deleveraging Organic of funds value: Swiss Re Ltd PI3 • Capital return of up to USD 10.6bn to shareholders sin
Slide 25: Swiss Re's very strong capital position enables the capital allocator role
Swiss Re's very strong capital position enables the capital allocator role for the Group USD bn 245% 241% 223% 208% 213% 185% Group SST respectability level 48.7 52.2 52.6 38.5 40.7 18.5 19.1 19.8 21.6 23.6 SST 1/2011 SST 1/2012 SST 1/2013 SST 1/2014 SST 1/2015 SST risk-bearing capital SST target ca
Slide 26: Through Reinsurance we will continue to shift portfolios
Through Reinsurance we will continue to shift portfolios in line with our underwriting framework and growth strategy P&C Reinsurance portfolio composition1 L&H Reinsurance portfolio composition1 US GAAP Gross Earned Premiums US GAAP Gross Earned Premiums 7% 7% 7% 7% 8% 9% 14% 15% 15% 18% 20% 21% 4%
Slide 27: We will do the same through Corporate Solutions' diversified portfolio
We will do the same through Corporate Solutions’ well diversified portfolio…. By line of business By geography GPW 9M 2015 GPW 9M 2015 14% 8% 11% 21% 24% Credit & Surety 29% Asia Pacific Special Lines Latin America 57% Casualty 36% EMEA Property North America By industry GPW Food & Tobacco 5% Retail
Slide 28: Through Life Capital we will systematically allocate capital to Life & Health risk pools
…. and through the creation of Life Capital we will systematically allocate capital to attractive and growing Life & Health risk pools Illustrative Example products Unit-linked policies Annuities Biometric protection • Indirect equity risk • Longevity risk • Mortality & • Persistency risk • Credit/s
Slide 29: Steady investment performance through active asset re-balancing
Steady investment performance through active asset re-balancing despite continued low yield environment 7% 6.3% 6% 5.3% 5.0% 5% 4.7% 4.4% 4.0% 4% 3.7% 3.8% 3.5% 3.6% 3% 2% 1.8% 1% 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 9M 2015 1 10-year avg US Treasury risk-free rates ROI Running yield
Slide 30: Systematic capital allocation is essential for achieving our targets
Systematic capital allocation is essential for achieving our Group and Business Unit targets Group financial targets ROE ENW per share growth Rf+700bps 10% per annum 2016 Over the cycle 2015 2016 Over the cycle Year-end ENW + dividends from current year divided by 700bps above risk free (10-year US
Slide 31: Agenda
Agenda Swiss Re at a glance and market developments Group strategic framework Capital allocation Client base Resources and platforms Differentiation Capital allocation to deliver sustainable shareholder value Conclusion Bellevue meets management seminar | Zurich, 14 January 2016 31
Slide 32: Systematic capital allocation to risk pools is at the core of our strategy
Systematic capital allocation to risk pools is at the core of our strategy Long-term Broad and diversified access shareholder value to risk pools Client segments Capital markets Risk pools Capital Capital (re-) management allocation priorities Access/cost Continuous Economic based of funding knowled
Slide 33: Swiss Re's capital management aims to deliver sustainable shareholder value
Swiss Re’s capital management aims to deliver sustainable shareholder value Aim is to deliver long-term shareholder value • Strategic framework enabling systematic allocation of capital to risk pools • Very strong capital position across multiple metrics • Steady investment performance through activ
Slide 34: Bellevue meets management seminar | Zurich, 14 January 2016
Bellevue meets management seminar | Zurich, 14 January 2016 34
Slide 35: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 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 29 April First Quarter 2016 Results Conference call Investor Relations contacts Hotline E-mail +4
Slide 36: 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