Swiss Re Ag · SIX:SREN
Swiss Re — FY2013 Earnings Presentation
21 slides from Swiss Re's earnings presentation, Mar 18, 2014
Slide 1: Annual EVM results 2013
Annual EVM results 2013 Zurich, 18 March 2014
Slide 2: EVM methodology
EVM methodology An integrated economic valuation and Key features accounting framework for business • Market consistent valuation of all planning, pricing, reserving, and steering assets and liabilities • Shows direct connection between risk • Exclusion of potential future new taking and value creat
Slide 3: 2013 EVM financial highlights
2013 EVM financial highlights Strong investment and underwriting performance • Significant 16% increase in EVM premiums and fees, USD 36.7bn • EVM profit USD 4.0bn – Excellent new business profit of USD 2.2bn, driven by higher volumes in P&C Re and L&H Re and organic growth in Corporate Solutions –
Slide 4: EVM key figures
EVM key figures Corporate Group Total Total USD million, unless otherwise stated P&C Re L&H Re Solutions Admin Re® items FY 2013 FY 2012 • Premiums and fees 16 061 17 137 3 462 36 660 31 707 • EVM income 4 801 -619 610 1 082 465 6 339 5 218 • EVM profit (loss) 3 568 -295 581 233 -80 4 007 4 152 of w
Slide 5: P&C Reinsurance
P&C Reinsurance Continued strong underwriting performance PV new business premiums EVM profit New business profit margin and fees a USD m +10% USD m % +0.2pts 14 562 16 061 3 568 17.5% 2 588 17.3% FY 2012 FY 2013 FY 2012 FY 2013 FY 2012 FY 2013 • Premium growth was mainly • New business profit USD 1
Slide 6: L&H Reinsurance
L&H Reinsurance Strong new business growth PV new business premiums EVM profit New business profit margin and fees As USD m +20% USD m % -5.5pts 10.4% 17 137 1 017 14 301 4.9% FY 2012 -295 FY 2013 FY 2012 FY 2013 FY 2012 FY 2013 • Increase in premiums and fees, • New business profit USD 0.6bn, • Pro
Slide 7: Corporate Solutions
Corporate Solutions Continued profitable growth PV new business premiums EVM profit New business profit margin and fees A USD m +40% USD m % +0.4pts 3 462 7.6% 581 2 465 7.2% 292 FY 2012 FY 2013 FY 2012 FY 2013 FY 2012 FY 2013 • Continued growth across most • New business profit USD 154m • New busin
Slide 8: Admin Re®
Admin Re® Strong investment performance PV new business premiums EVM profit Gross cash generation and fees (GCG)1 USD m USD m USD m -56.4% 1 196 804 379 233 521 112 392 FY 2012 0 FY 2013 FY 2012 FY 2013 FY 2012 FY 2013 • No premiums and fees in 2013 • EVM profit mainly driven by • USD 357m dividends
Slide 9: Investment activities
Investment activities Strong performance in 2013 Outperformance EVM profit EVM income USD m USD m -10% USD m -10% 4 022 1 614 2 980 3 605 2 679 1 262 FY 2012 FY 2013 FY 2012 FY 2013 FY 2012 FY 2013 • Positive performance on • Result was driven by gains in • Positive EVM income as equity equities and
Slide 10: Economic net worth (ENW)
Economic net worth (ENW) Strong increase driven by EVM income USD m 42 000 -2 760 38 000 6 339 -617 37 188 298 34 000 33 928 30 000 26 000 22 000 ENW Changes in EVM EVM income Dividends Other ENW 31 Dec 2012 accounting 31 Dec 2013 principles • Changes in accounting principles related to revised meth
Slide 11: Reconciliation EVM economic net worth to US GAAP shareholders' equity
Reconciliation EVM economic net worth to US GAAP shareholders' equity Total Re- Corporate Admin Group (after USD billions insurance P&C Re L&H Re Solutions Re® items consolidation) US GAAP shareholders’ equity at 31 Dec 2013 19.5 13.3 6.2 2.8 5.8 4.9 33.0 Discounting 7.3 6.0 1.3 0.5 -1.1 0.0 4.3 Mar
Slide 12: Group financial targets
Group financial targets On track ROE 700 bps above risk free EPS growth 10% average ENW per share growth plus average over 5 years (2011- annual growth rate, adjusted dividends 10% avg. annual 2015) for special dividends1 growth rate over 5 years in % in USD2 in USD2 144.5 13.0 13.4 13.7 11.9 119.4
Slide 13: Appendix
Appendix 13 EVM results 2013 Annual 13
Slide 14: EVM segmental income statement 2013
EVM segmental income statement 2013 Re- Corporate Admin Group USD millions insurance P&C Re L&H Re Solutions Re® items Total Underwriting result New business result Premium and fees 33 198 16 061 17 137 3 462 36 660 Claims and benefits -20 537 -9 192 -11 345 -1 880 -22 417 Commissions -6 210 -3 103
Slide 15: EVM balance sheet 2013
EVM balance sheet 2013 Re- Corporate Group Consoli- 31 December 2013, USD millions insurance P&C Re L&H Re Solutions Admin Re® items dation Total Assets Investments 94 805 54 073 40 732 7 370 55 980 7 691 -4 836 161 010 Cash and cash equivalents 5 453 5 288 165 562 1 759 309 8 083 In-force business
Slide 16: MCEV and EVM 2013 comparison
MCEV and EVM 2013 comparison MCEV recognises higher value than EVM USD bn 0.4 45 0.7 40 4.8 43.1 35 37.2 30 25 20 Economic net worth Differences Differences Non-Life Other differences MCEV 31 Dec 2013 Life business1 business1 31 Dec 2013 (estimate) • MCEV uses swap yield curves are used as reference
Slide 17: EVM developments
EVM developments 2013 2014 • As of 1 January 2013, the • The application of frictional capital methodology for the EVM valuation of costs will be revised. Parent tax assets and liabilities was revised. companies will benefit from a funding The cumulative effect upon initial credit for business that
Slide 18: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 24 March 2014 Annual General Meeting Briefing Conference call 11 April 2014 150th Annual General Meeting Zurich 7 May 2014 First Quarter 2014 results Conference call 3 July 2014 Investors' Day London 6 August 2014 Second Quarter 2014 results Conferenc
Slide 19: Annual EVM results 2013
@ Swiss Re Annual EVM results 2013, 19
Slide 20: Cautionary note on non-GAAP financial measures
Cautionary note on non-GAAP financial measures This presentation includes information on Economic Value Management (“EVM”) which contains non-GAAP financial measures. EVM is not based on US GAAP, which are the principles in accordance with which Swiss Re prepares its consolidated financial statement
Slide 21: 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