Swiss Re Ag · SIX:SREN
Swiss Re — ZKB Swiss Equity Conference 2022
19 slides from Swiss Re's conference presentation, Nov 4, 2022
Slide 1: Swiss Re – Leading Global Re/Insurer
Swiss Re – Leading Global Re/Insurer ZKB Swiss Equity Conference Thierry Léger, Group Chief Underwriting Officer Zurich, 4 November 2022
Slide 2: We run three distinct businesses supported by one Group foundation
We run three distinct businesses supported by “one” Group foundation Reinsurance is at the core of our business as a leading > global reinsurer Corporate Solutions is a specialised risk partner to > corporate clients iptiQ is our globally leading digital B2B2C insurance > platform, focusing on perso
Slide 3: Multiple crises lead to challenges and opportunities
Multiple crises lead to challenges and opportunities Supply chain Inflation disruption Geopolitical Food crisis crisis Climate Energy crisis change ZKB Swiss Equity Conference 2022 3
Slide 4: Third quarter performance heavily impacted by elevated P&C Reinsurance loss activity
Third quarter performance heavily impacted by elevated P&C Reinsurance loss activity, while L&H Reinsurance and Corporate Solutions delivered strong results Swiss Re Group 9M 2022 Q3 2022 key figures key figures Combined ratio 106.1% 119.5% P&C 1 258 Reinsurance Net income Normalised4 (USD m) combin
Slide 5: Corporate Solutions on track for 2022 combined ratio target; P&C Re impacted by nat cat
Corporate Solutions well on track to achieve its 2022 combined ratio target, while P&C Re’s result impacted by elevated nat cat losses and higher small- to mid-sized claims P&C Reinsurance Corporate Solutions 130% Reported Normalised1 130% Reported 125% 125% 120% 120% 115% 115% Combined ratio Combin
Slide 6: L&H Reinsurance with strong results for the second consecutive quarter
L&H Reinsurance with strong results for the second consecutive quarter, supported by significantly lower COVID-19 impacts COVID-19 800 mortality losses (US GAAP, USD m) 600 400 Incurred Reported 200 0 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Net income1 (USD m) 299 -225 -2 -
Slide 7: Nat cat is a core line of business and an area of structural growth
Nat cat is a core line of business and an area of structural growth Nat cat is a USD 35bn reinsurance market, growing faster than GDP More than 60% of nat cat losses still uninsured Nat cat – reinsurance market premiums1 (USD bn) Average nat cat losses1 (2012-2021, USD bn) 48 7-8% CAGR 35 25% Asia 1
Slide 8: We refine our models continuously to reflect changes to risk drivers
We refine our models continuously to reflect changes to risk drivers, including climate Selected enhanced secondary perils since 2019 Actions taken since 2019 Canada Europe illustrative Convective storm Convective storm Europe Winter storm Subsidence France Flood Flood Austria, Hungary, Netherlands,
Slide 9: Global scale and diversification of nat cat book drives resilient profitability
The global scale and diversification of our nat cat book drives resilient profitability US GAAP 100% 185% combined ratio of P&C Re nat cat book1 108% 88% 77% 75% 65% 59% 70% 51% 36% 30% FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 Average Cost of capital covered 75% 69% USD ~9bn 10-ye
Slide 10: CPI and construction prices impact short-tail lines
CPI and construction prices impact short-tail lines… Core CPI is not the key inflation driver of reserve sensitivity Our exposure to inflation by line of business Duration (years) US GAAP net reserves illustrative EVM net reserves Property 2 Space 2 Agriculture 2 Marine 3 Cyber 4 Credit & surety 4 E
Slide 11: Social, wage and medical inflation affect more long-tail lines
…while social, wage and medical inflation affect more long-tail lines Key inflation indicators for selected markets 30%(expected y-o-y change 2022 vs 2021, in %) US Germany Japan 27.0 UK Australia China 25% 23.1 20.0 20.0 20% 18.4 2010-19 averages 16.7 16.1 16.0 15% 12.8 11.0 10% 9.1 8.1 8.3 8.0 7.0
Slide 12: Rising interest rates provide significant uplift to recurring income
Rising interest rates provide significant uplift to recurring income 4.5 Recurring income yield1 and fixed income reinvestment yield (%) 4.1% 4.0 4.1% 3.5 fixed income reinvestment 3.0 2.8% yield in Q3 2022 2.5 2.0 Quarterly recurring income increased by USD ~100m 1.5 in Q3 2022 vs. Q3 2021 1.0 0.0
Slide 13: We expect to achieve a 2024 US GAAP ROE of 14%
We expect to achieve a 2024 US GAAP ROE of 14% Profitable growth Earn-through of combined with cost Reduced drag from L&H Re higher under- discipline 14.0% COVID-19 writing margins pre-2004 US book normalisation ~1-1.5%pt ~1%pt ~1%pt ~5%pts 5.7% Reported US GAAP IFRS US GAAP ROE ROE1 ROE2 2021 2024
Slide 14: Our capital management priorities remain unchanged
Our capital management priorities remain unchanged Group SST ratio1 development Our capital management priorities 274% 269% Ensure superior Grow the regular dividend capitalisation with long-term earnings, and 251% at all times and maximise at a minimum maintain it financial flexibility 232% Capital
Slide 15: Key messages
Key messages • 9M 2022 performance heavily impacted by elevated P&C Reinsurance loss activity, while L&H Reinsurance and Corporate Solutions are well on track to reach their 2022 financial targets • Despite higher-than-expected losses to-date in 2022, nat cat is a core line of business and an area o
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Slide 17: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 2023 17 February Annual Results 2022 Conference call 16 March Publication of Annual Report 2022 12 April 159th Annual General Meeting 04 May Q1 2023 Results Conference call Investor Relations contacts Hotline E-mail +41 43 285 44 44 Investor_Relations
Slide 18: 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
Slide 19: Legal notice
Legal notice ©2022 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