Swiss Re AG · SIX:SREN
Swiss Re — Investor Presentation (April 2021)
76 slides from Swiss Re's investor presentation, April 2021
Slide 1: Swiss Re – Leading Global Re/insurer
Swiss Re – Leading Global Re/insurer Company presentation as of April 2021
Slide 2: Swiss Re – Leading Global Re/insurer
Swiss Re – Leading Global Re/insurer Overview and Capital P&C and L&H Corporate Group Strategy Management Reinsurance Solutions page 4 page 17 page 28 page 40 iptiQ Asset Global Re/insurance Sustainability & protection gap page 50 Management page 60 page 69 page 54 Swiss Re Group | Company presentat
Slide 3: A truly global reinsurer… Profitable long-term growth opportunities
A truly global reinsurer1… Profitable long-term growth opportunities • Reinsurance market growth of 5-6%3 p.a. 20% • Leading reinsurer in High Growth Markets Group financial 48% • iptiQ 2017-20 GPW CAGR of >80% targets over-the-cycle 32% • Corporate Solutions turnaround ahead of track Financial stre
Slide 4: Financial highlights: Overview and Group Strategy
Financial highlights Overview and Group Strategy Swiss Re Group | Company presentation | March 2021 4
Slide 5: Swiss Re Group at a glance
Swiss Re Group at a glance Swiss Re is a leading and highly diversified global re/insurer, founded in Zurich (Switzerland) in 1863 • Swiss Re Group’s Swiss Solvency Test (SST) ratio for 2020 is 215%1, within the new target range of 200–250% • Financial strength2 of the Swiss Re Group is currently ra
Slide 6: We aim to operate as 'One Swiss Re'
We aim to operate as ‘One Swiss Re’ Risk Knowledge Leadership Client Collaboration & Access Capital Strength Reinsurance A leading global reinsurer Our People A specialised risk partner with direct Risk Knowledge Leadership Client Collaboration & Access Capital Strength Corporate Solutions access to
Slide 7: We operate a truly global and diversified Group
We operate a truly global and diversified Group Premiums Americas EMEA Asia «We make the EVM1 USD 24bn USD 19bn USD 15bn world more US GAAP2 USD 19bn USD 13bn USD 8bn resilient» >150 countries >100 000 P&C clients supported >175 million Premiums per country1 family members supported USD >3bn USD 0 t
Slide 8: Swiss Re has generated attractive economic earnings over the last 5 years
Swiss Re has generated attractive economic earnings over the last 5 years, despite significant headwinds EVM figures excluding COVID-19 impact 1 4 6 EVM profit USD 465m EVM profit Economic value is created if new business avg. 2016 - 2020 total economic return generated USD 157m Total contribution t
Slide 9: Total shareholder return best tracked by economic net worth developments
Swiss Re’s total shareholder return is best tracked by economic net worth (ENW) developments ENW per share growth vs. total shareholder return1 ENW per share vs. share price development 130 250% 130 120 120 110 200% 110 100 150% 100 90 90 80 100% 80 70 70 50% 60 60 50 0% 502014 2015 2016 2017 2018 2
Slide 10: Swiss Re's capital repatriation remains peer-leading
Swiss Re’s capital repatriation remains peer-leading Dividends and share buyback per share (CHF, CAGR in %) +8% 9.20 8.65 8.70 8.00 8.25 7.90 7.50 4.20 3.10 6.50 4.40 3.40 1 5.90 3.30 0.60 4.15 4.00 1 3.00 5.60 5.90 4.60 4.85 5.00 3.85 4.25 3.50 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Ordi
Slide 11: We monetise our R&D capabilities
We monetise our R&D capabilities, cementing Swiss Re as the leading knowledge company R&D value driver framework Strategic focus areas Project examples Business steering R&D for UW priorities Key perils risk views and pricing tools Risk engineering services Insurance beta Flood risk solutions Rapid
Slide 12: Our strategy offers more than traditional risk transfer
Our strategy offers more than traditional risk transfer sigma research SONAR New emerging risks insights SwiftRe® Surety Client Portal Magnum Ex Tool CatNet® MPL for explosions PUMA FacEasy Engineering underwriting PULSE Online risk management Public sector Traditional risk Large and complex risk tr
Slide 13: COVID-19 crisis significantly impacts the risk landscape
… although the COVID-19 crisis significantly impacts the risk landscape Key impact on re/insurance industry Swiss Re response Maintain strong balance sheet and proactively Significant uncertainty on ultimate losses establish appropriate COVID-19 reserves Continue to develop and promote Insurance pro
Slide 14: Reported US GAAP COVID-19 losses continue to reflect high IBNR
Swiss Re’s reported US GAAP COVID-19 losses continue to reflect high levels of IBNR Swiss Re’s reported COVID-19 losses in FY 2020 (USD m, pre-tax) 503 3 879 3 879 IBNR Paid & case reserves 912 24% Q4 251 59% 11% Q3 1 398 53% Q2 815 41% 12% Q1 Event cancellation Business interruption Credit & surety
Slide 15: Remaining COVID-19 losses estimated at USD <0.5bn
Remaining COVID-19 losses are estimated at USD <0.5bn across P&C Reinsurance and Corporate Solutions in 2021 Pre-tax US GAAP Best estimate of pre-tax losses booked in US GAAP losses1 in FY 2020 (USD) FY 2021 (USD) • Corporate Solutions has limited exposure in 2021 as book is in run-off Event cancell
Slide 16: Capital Management
Financial highlights Capital Management Swiss Re Group | Company presentation | March 2021 16
Slide 17: Group targets and capital management priorities remain unchanged
Our Group targets and capital management priorities remain unchanged Group financial targets Capital management priorities Over-the-cycle targets Priority I Priority II Ensure superior capitalisation Grow the regular dividend Rf + 700 at all times and maximise with long-term earnings, and bps financ
Slide 18: 2020 featured strong dividend flows to the Group
2020 featured strong dividend flows to the Group Excellent track record of external capital repatriation Liquid funds at Group level USD bn, in year paid 2.6 2.9 2.6 2.0 1.9 USD bn 1.3 4.0 1.1 0.9 0.0 Share buyback and 0.2 special dividend 1.6 1.6 1.7 1.8 1.9 Ordinary dividend Life Capital dividend
Slide 19: Very strong Group capital position, SST ratio within target range
Swiss Re maintains a very strong Group capital position, with Group SST ratio within the newly established target range Group SST ratio1 development USD bn unless otherwise stated 269% 261% 262% 251% 232% 215% Target range 200-250%2 • Despite the impact of COVID-19, the Group SST ratio remains very
Slide 20: Group SST capital generation impacted by COVID-19 and low rates
Group SST capital generation impacted by COVID-19 and declining interest rates Group solvency capital generation in 2020 41.9 41.5 +1.7 -1.1 -0.5 -0.4 -0.2 -0.6 +0.9 SST available capital (USD bn)1 SST 1/2020 ReAssure sale Economic Interest rate, Capital Other (incl. Change in Capital SST 1/2021 ear
Slide 21: Risk profile well diversified following sale of ReAssure
Swiss Re’s risk profile is well diversified following the sale of ReAssure Group SST economic target capital • Increase in P&C risk mainly driven by assumption updates on inflation risk and higher reserving risk related to COVID-19 claims Property & Casualty 12.9 +1.2 • Increase in L&H risk mainly r
Slide 22: Capital strength resilient to market volatility and large losses
Capital strength is resilient to market volatility and large losses Financial market sensitivities Insurance stresses Resulting estimated Group SST ratio 1/2021 Resulting estimated Group SST ratio 1/20211 Group SST Group SST 1/2021 1/2021 215% 215% Equity markets (-25%) 211% 1 in 200-year Atlantic h
Slide 23: Dynamic capital structure provides financial flexibility
Swiss Re’s dynamic capital structure provides significant financial flexibility Group available capital and leverage Strong access to diversified funding sources USD bn 47.6 47.8 • Despite COVID-19 market turbulence, Swiss Re raised EUR 800m 1.9 44.5 Additional USD 2.7bn of subordinated debt to supp
Slide 24: Alternative Capital Partners is our unified center of expertise
Alternative Capital Partners (ACP) is our unified center of expertise in the alternative capital space Increased presence in the alternative capital market Principal investor in ILS1 ILS structurer and bookrunner2 AC market leadership 1.5 9 +10% 8 Knowledge and reputation are the 7 foundations for f
Slide 25: ACP has sourced more than USD 2bn of additional alternative capital
ACP has sourced more than USD 2bn of additional alternative capital in a challenging market environment since 2018 Nat cat growth supported by our increasing sidecar platform and cat bond issuances Outstanding nat cat bonds1 Exposure management 2.0 1.5 Newly created fund Shortfall relief North USD b
Slide 26: ACP acts as extension of our capital structure
ACP acts as a significant extension of our capital structure Supporting efficient capital structure Total capital relief at target level1 Capital efficiency 2.5 +75% Find alternative sources of capital below our 2.0 WACC and improve our overall portfolio diversification 1.5 USD bn • Assessing capita
Slide 27: P&C and L&H Reinsurance
Financial highlights P&C and L&H Reinsurance Swiss Re Group | Company presentation | March 2021 27
Slide 28: Differentiation drives our Reinsurance business and enables growth
Differentiation drives our Reinsurance business and enables growth in Core, Transactions and Solutions Core Transactions Solutions Traditional reinsurance offerings Tailored and structured reinsurance Additional value-adding services How we win Brand and Scale and Ability to Balance sheet Joint risk
Slide 29: Diversification across client segments, lines of business and regions
Our business benefits from diversification across client segments, lines of business and regions We continue to grow our book… … and aim to maintain our diversified earnings profile Economic premiums (USD bn) P&C Re L&H Re By client segment2 50.8 52.5 36.5 38.9 46% 45% 64% 61% 58% 59% Regional & Nat
Slide 30: Strong client franchise
We have a strong client franchise but are not resting on our laurels Close relationships built over time are one of our key assets, leading to… … top rankings with our clients NMG study Business Capability Index1, 2020 2 315 active reinsurance clients P&C Re ‘Right service for right client’ using cl
Slide 31: Increased operating efficiency by leveraging global platform
We have increased our operating efficiency by fully leveraging our global platform What P&C Re situations trigger cost ratio1 has recaptures? reduced, now in line with peers2 L&H Re has moved to a more competitive cost ratio1,2 35 30 33.4 25.8 Total cost ratio % Total cost ratio % Peer 1 25 30.3 Swi
Slide 32: Our Solutions accelerate our clients' business ambitions
Our Solutions are designed to accelerate our clients’ business ambitions Solutions enable our clients to achieve their business goals across the value chain Economic profit1 USD m 392 Product Underwriting & Sales & Claims & in-force development pricing distribution management 336 Customer engagement
Slide 33: Rebalancing portfolio in line with Target Liability Portfolio
We are rebalancing our portfolio in line with our Target Liability Portfolio and our core strengths We actively steer our portfolio… … based on pricing outlook and market trends Enhanced profitability Pricing1 X Exposure2 = Premium 1 Property cat 2 Property non-cat 3 Liability 8 4 Motor 7 5 Marine a
Slide 34: Attractive price increases in January 2021 renewals
Swiss Re achieved attractive price increases in January 2021 renewals Nominal price change +6.5% • 46% of Swiss Re’s reinsurance Higher loss assumptions -1.5% treaty business renewed in USD bn Lower interest rates -3.5% January Premium change -11% • 5.3% price increases in 8.8 proportional business
Slide 35: P&C Reinsurance results impacted by COVID-19 and large losses
P&C Reinsurance results were impacted by COVID-19 and other large losses, while the underlying performance was strong Net premiums earned Net operating margin1 (%) Combined ratio (%) 111.5 107.8 109.0 104.0 -3.7pts 99.8 3.8 93.5 excl. COVID-19 0.1 USD 20.8bn 83.7 85.7 10.7 8.2 2014 2015 2016 2017 20
Slide 36: P&C Re aims to selectively expand portfolio and increase margins
P&C Re aims to selectively expand the portfolio and increase margins 1 Nat cat: continue to develop our book at attractive rates 2 Specialty: capture profitable opportunities P&C Re Text 3 Regional & Nationals: expand our client base 4 Actual vs expected earnings: address areas of recent underperfor
Slide 37: L&H Reinsurance achieved a solid underlying performance
L&H Reinsurance achieved a solid underlying performance Net premiums earned Running yield and ROI (%) • Net operating margin1 3.8 (%) -7.1pts 3.5 3.4 3.3 3.4 3.3 3.0 10.0 5.0 4.3 2.7 3.4 3.6 3.7 3.7 USD 13.7bn 3.2 2.9 in 2020 12.3 2014 2015 2016 2017 2018 2019 2020 10.2 Running yield ROI USD 12.8bn
Slide 38: L&H Re aims to continue profitable growth and margin management
L&H Re aims to continue profitable growth and margin management Portfolio steering: develop mortality book and seize opportunities in health and 1 longevity L&H Text Re 2 Growth: continue expansion in Asia and further portfolio diversification 3 In-force margins: active management of in-force busine
Slide 39: Corporate Solutions
Financial highlights Corporate Solutions Swiss Re Group | Company presentation | March 2021 39
Slide 40: Corporate Solutions provides access to a USD 800bn direct insurance market
Corporate Solutions provides access to a USD 800bn underlying direct insurance market Commercial lines remain an attractive and growing risk pool Corporate Solutions addressable market GPW in USD bn Excess & Follow 1,262 Core segments1 CAGR 4.1% ~30% Primary Lead 540 North America incl. Internationa
Slide 41: Direct access to corporate customers is a strategic asset
Our direct access to corporate customers is a strategic asset Core target customer universe GPW by customer segment USD ~90bn GPW USD ~140bn GPW Leading franchise as a ~28 000 Target specialised risk partner universe: Direct customer for corporates ~40 000 relationships1 large and mid-sized Other2 C
Slide 42: Building on technical excellence to pursue focused opportunities
Building on our technical excellence to pursue focused opportunities Capture market opportunities within our de-commoditised core • Focus on selected lines and segments where we have a proven competitive advantage • Leverage strong and continuing rate momentum Excel with the basics Grow with our dif
Slide 43: Corporate Solutions turnaround is ahead of plan
Corporate Solutions turnaround is ahead of plan Net premiums earned Net operating margin1 (%) Combined ratio (%) 133.4 127.9 117.5 116.5 +6.2pts 101.1 93.0 93.2 USD 4.0bn 8.7 93.2 5.1 excl. COVID-19 0.5 -8.1 2014 2015 2016 2017 2018 2019 2020 in 2020 -16.1 • FY 2020 large nat cat events 0.1%pts abov
Slide 44: Corporate Solutions normalised combined ratio development
Our Corporate Solutions normalised combined ratio development ~4%pts ~8%pts 110% ~12%pts ~2%pts ~5%pts 97% <97% ~2%pts FY 2018 Assumption Portfolio pruning Rate increases Net expense Adjusted Man-made 2020 FY 2021 target (normalised1) revisions savings reinsurance claims activity (normalised1) (norm
Slide 45: Shifting capital allocation towards a less volatile portfolio
Shifting our capital allocation towards a rebalanced, less volatile portfolio Portfolio split by region and sub-line Portfolio development % of gross premiums written Gross premiums written, USD bn 4.7 0.2 -0.2 ~4.8 USD 4.7bn USD 4.8bn 11% 12% APAC 22% -0.9 1.0 26% EMEA 11% 8% Latin America North Am
Slide 46: Strong pricing trends and rebalancing of portfolio
Corporate Solutions continues to benefit from strong pricing trends and rebalancing of portfolio Corporate Solutions achieved significant price increases Targeted pruning actions and selected focus areas Compound price quality change (%) Gross premiums written 15 Total Corporate Solutions price qual
Slide 47: Growing with differentiated Primary Lead propositions
Growing with differentiated Primary Lead propositions Evolution of Primary Lead capabilities Generating more Lead business with our differentiated propositions International Programmes Capture opportunities in international programme lead business leveraging leading proprietary technology platform ~
Slide 48: Strategic engagement with corporates extends across Swiss Re Group
Corporate Solutions’ strategic engagement with corporates extends across Swiss Re Group Long-term relationships with corporate customers have fostered the possibility for strategic engagements across Swiss Re Group Swiss Re commercial insurance Swiss Re commercial insurance Swiss Re commercial insur
Slide 49: iptiQ
Financial iptiQ highlights Swiss Re Group | Company presentation | March 2021 49
Slide 50: iptiQ – a global B2B2C digital insurance platform
iptiQ – a global B2B2C digital insurance platform aimed at both digital and traditional affinity distribution partners B2B2C model Global expansion accelerating • iptiQ will become a standalone division, reporting directly to Corporates Insurers B2C the Group CEO B2B • Successful launch of iptiQ P&C
Slide 51: Market-implied valuation of USD ~2bn
Based on growth trajectory and peer valuations we estimate a market-implied valuation of USD ~2bn Strong growth trajectory since inception Attractive peer valuations 20x 371 Gross CAGR +83% premiums written1 211 (USD m) USD 89 7x blended average ~2bn 61 7x 5x 2017 2018 2019 2020 3x # of partners 12
Slide 52: iptiQ gross premiums written, policy count and gross income
Gross premiums written (USD m) In-force policy count (thousands) Gross income1 (USD m) # of distribution partners +76% +77% +311% 40 371 668 37 at YE 2020 211 377 9 29 at YE 2019 2019 2020 2019 2020 2019 2020 Increase in GPW by USD 160m Policy count increased iptiQ earns technical profits on iptiQ i
Slide 53: Asset Management
Financial highlights Asset Management Swiss Re Group | Company presentation | March 2021 53
Slide 54: High-quality investment portfolio has performed consistently
Swiss Re’s high-quality investment portfolio has performed consistently amid market volatility and the low interest rate environment Key performance indicators over 5 years Fixed income maturities and unrealised gains Return on investment (ROI)1 Duration split of fixed income maturities 3.6% 3.0% 44
Slide 55: Pioneering ESG approach delivers better risk-adjusted returns
Pioneering ESG approach delivers better risk-adjusted returns while providing downside protection ESG investments outperform during key periods of high volatility Swiss Re’s YTD ESG outperformance Cumulative excess return of ESG-based indices vs traditional indices 7.0% 0.7% Equity1 (LHS) 5.0% 0.5%
Slide 56: We target outperformance through key initiatives
We target outperformance through a set of key initiatives Further build-up in • Selective growth in private debt and private equity, focusing on price and quality private markets • Expansion of infrastructure mandate and opportunities such as mid-market loans Geographic • Balanced portfolio shift to
Slide 57: Strong value drivers will help us thrive in uncertain markets
Strong value drivers will help us thrive in uncertain markets Investment outlook Economic recovery underway, while high ✓ Portfolio quality and positioning: uncertainty persists we continue to deliver stable returns amid a low-yield and highly volatile market environment Monetary and fiscal policies
Slide 58: Strong investment result in 2020 despite market volatility
Strong investment result in 2020 despite unprecedented market volatility Return on investments (ROI) Investment portfolio positioning (USD bn) Net investment income (USD m, LHS) Running yield (%, RHS) 140 133.4 3.3 14.5 122.4 3.0 120 2.9 2.9 2.9 109.9 2.8 21.6 3.5% 100 13.3 2.4 54.4 3 567 3 386 3 39
Slide 59: Sustainability
Sustainability Swiss Re Group | Company presentation | April 2021 59
Slide 60: Swiss Re has a long tradition in sustainability
Swiss Re has a long tradition in sustainability Signing of Adopted FSB TCFD recommendations Net-zero Signing of Reduced investing 100% GHG Reduced providing powered in thermal re/insurance by renewable emissions First sustainability- related publication coal companies to thermal coal sources in oper
Slide 61: Implementing our Group Sustainability Strategy
We continue to implement our Group Sustainability Strategy Our Group Sustainability Strategy guides us in identifying what is most material Through this, we aim to reinforce our efforts to make the world more resilient and sustainable Swiss Re Group | Company presentation | April 2021 61
Slide 62: Sustainability in underwriting: key actions in 2020
Sustainability in underwriting: key actions in 2020 Carbon steering mechanism further advanced 2020 achievements Total amount of climate Thermal coal: policy complemented with a treaty approach, introducing protection offered to stricter coal exposure thresholds from 2023 onwards. Phase-out of therm
Slide 63: Sustainability in investments: three cornerstones
Sustainability in investments: built on three cornerstones… Enhancement Inclusion Exclusion We integrate Environmental, Social, and Governance (ESG) ESG benchmarks & criteria Thematic investments Sustainability risk assessments ESG integration focused on ESG Positive and direct real-world impact Ris
Slide 64: Climate action focus and associated targets
… we focus on climate action and set associated targets Climate Action Targets by 2025 Carbon intensity reduction3 -35% Set targets, take actions, measure & report Enable the transition to a net-zero emission economy Renewable & social and mitigate climate related risks infrastructure USD +750m Set
Slide 65: Sustainability in own operations: journey to net-zero
Sustainability in own operations: setting sail on our journey to net-zero We are committed to net-zero operational emissions by 2030: “Do our best, remove the rest” 100% of our power from renewable sources • Co-founded the RE100 Initiative together with IKEA in 2014 • Reached our own RE100 target (1
Slide 66: Sustainability governance linked to compensation
Sustainability governance: strengthened through linking sustainability targets to compensation • Swiss Re has a well-defined governance framework to define, implement and monitor our Group Sustainability Strategy • In 2020, we included sustainability-related key performance indicators (KPIs) and per
Slide 67: Swiss Re continues to progress as a sustainability leader
Swiss Re continues to progress as a sustainability leader Find out more: What lies ahead: Sustainability in underwriting • Quantify and grow sustainability opportunities • Continue to build lasting partnerships to develop scalable solutions addressing sustainability challenges Sustainability Risks •
Slide 68: Global Re/insurance and protection gap
Financial highlights& protection gap Global Re/insurance Swiss Re Group | Company presentation | March 2021 68
Slide 69: Global cat losses totaled USD 202 billion in 2020
Global cat losses totaled USD 202 billion in 2020, and 44% was insured USD 113 billion Source: Swiss Re Institute Swiss Re Group | Company presentation | April 2021 69
Slide 70: Disaster losses mostly uninsured, highlighting protection gap
Disaster losses still mostly uninsured, highlighting a protection gap 500 450 Economic losses = 400 insured + uninsured 350 losses 300 250 200 150 100 50 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Insured losses Uninsured losses 10-year moving average insured losses 10-year moving aver
Slide 71: Insured losses in 2020 totalled USD 89 billion
Insured losses in 2020 totalled USD 89 billion Insured losses, 1970-2020 (USD bn at 2020 prices) 180 Hurricanes Japan, NZ Harvey, earthquakes, Irma, Maria 160 Hurricanes Thailand flood Camp Fire, Katrina, Rita, Wilma Typhoon 140 Jebi 120 Hurricanes Ivan, Hurricane Charley, Frances Hurricane 100 Laur
Slide 72: First team in reinsurance dedicated to the public sector
UK Turkey Egypt United States Flood risk Earthquake Hospital cash • 1st team in the Flood risk pool reinsurance industry Caribbean Hurricane, earthquake Heilongjiang to be fully dedicated and excess rainfall risk Multiperil disaster risk to the public sector Louisiana Beijing Hurricane risk Agricult
Slide 73: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 2021 16 April 157th Annul General Meeting Zurich 30 April Q1 2021 Key Financial Data Conference call 30 July H1 2021 Key Financial Data Conference call 29 October 9M 2021 Key Financial Data Conference call 01 December Investors’ Day Live webcast Inves
Slide 74: Swiss Re Group | Company presentation | April 2021
Swiss Re Group | Company presentation | April 2021 74
Slide 75: 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 76: Legal notice
Legal notice ©2021 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