Slide 1: Annual results 2015
Annual results 2015 Investor and analyst presentation Zurich, 23 February 2016 We make the world more resilient.
Slide 2: Today's agenda
Today’s agenda • Key achievements Michel M. Liès, Group CEO • Financial performance David Cole, Group CFO • Business and strategy outlook Michel M. Liès, Group CEO Annual results 2015 2
Slide 3: Key achievements
Key achievements Michel M. Liès, Group CEO Annual results 2015 3
Slide 4: 2015 was a successful year for Swiss Re Group
2015 was a successful year for Swiss Re Group Successful delivery on ROE and EPS Group financial targets 13.7% and USD13.4 Underwriting discipline maintained 87.4% combined ratio Strong investment performance from Asset Management 3.5% ROI SST estimated Very strong Group economic capitalisation arou
Slide 5: Our Business Units also reported multiple successes in 2015
Our Business Units also reported multiple successes in 2015 Corporate Reinsurance Life Capital1 Solutions P&C L&H Admin Re® • Solid underwriting • Strong profitability in • Creation of Life Capital results challenging market, to manage closed and • Portfolio rebalancing reflecting disciplined open L
Slide 6: Continued solid underwriting track record in P&C
Continued solid underwriting track record in P&C in % 120 5% 110 114.1 4% 101.1 98.3 98.2 97.3 104.7 100 104.0 95.4 97.4 92.9 91.3 3% 98.4 98.4 97.9 89.3 96.8 90 93.7 93.9 90.4 90.2 87.4 2% 85.7 85.4 80 83.1 1% 70 60 0% 1 5-year avg US Treasury risk-free rates (RHS) Group combined ratio (LHS) Group
Slide 7: L&H Reinsurance is back on track to deliver strong results
L&H Reinsurance is back on track to deliver strong results USD m 1 400 8% 1 200 7% 6% 1 000 5% 800 4% 600 1 242 1 176 1 234 1 134 3% 822 885 400 767 804 811 657 670 661 2% 200 1% 331 0 0% Avg 10-year US Treasury risk free rate Operating income1 Management actions brought L&H Reinsurance back on trac
Slide 8: Continued trend of strong investment performance amidst challenging market conditions
Continued trend of strong investment performance amidst challenging market conditions 7% 6% 5.2% 4.8% 4.9% 5% 4.6% 4.3% 4.1% 4% 3.6% 3.3% 3.2% 3.2% 3.0% 3% 6.3% 5.0% 5.3% 4.7% 4.4% 2% 4.0% 3.7% 3.5% 3.6% 3.5% 1% 1.8% 0% Avg 10-year US Treasury risk-free rate ROI Running yield Swiss Re has demonstrat
Slide 9: Swiss Re's capital actions returned significant value to shareholders
Swiss Re’s capital actions returned significant value to shareholders Capital management actions Dividend flows since new structure created in 2012 • Ongoing execution of launched public share USD 12.1bn1 distribution to buy-back of up to CHF 1bn for 2015 excess shareholders capital Buy-back CHF 1bn
Slide 10: We achieved our ROE and EPS Group financial targets over 2011-2015
We achieved our ROE and EPS Group financial targets over the period of 2011-2015 ROE 700 bps above risk free average EPS growth 10% average annual growth over 5 years (2011-2015) rate, adjusted for special dividends2 in % in USD3 13.4 13.0 13.7 13.7 11.9 13.4 10.2 12.21 10.5 9.2 9.6 7.7 8.8 9.2
Slide 11: Financial performance
Financial performance David Cole, Group CFO Annual results 2015 11
Slide 12: 2015 financial highlights
2015 financial highlights • Swiss Re reports Group net income of USD 4.6bn, supported by both continuing strong underwriting performance and strong investment result; ROE 13.7% • P&C Reinsurance maintains strong earnings quality through disciplined underwriting and differentiation of services and kn
Slide 13: Key figures
Key figures Corporate Admin Group Total Total Total Total USD m, unless otherwise stated P&C Re L&H Re Solutions Re® items FY 2015 FY 2014 Q4 2015 Q4 2014 • Premiums earned and fee income 15 090 10 963 3 379 782 - 30 214 31 262 7 659 7 839 • Net income 2 977 939 340 422 -81 4 597 3 500 938 245 • Ret
Slide 14: P&C Reinsurance delivers strong results through diversified earnings stream
P&C Reinsurance delivers strong results through diversified earnings stream and large & tailored transactions Net premiums earned Combined ratio Net income USD m USD m 86.0% 3 564 15 598 15 090 83.8% 83.7% 3 228 14 542 2 990 2 977 ROE: 12 329 80.7% 22.2% 2012 2013 2014 2015 2012 2013 2014 2015 2012
Slide 15: L&H Reinsurance delivers strong operating result and achieves RoE target
L&H Reinsurance delivers strong operating result and achieves RoE target Premiums earned and fees Operating margin Net income USD m USD m 11 265 10 963 939 ROE: 10 023 9.9% 9 122 8.6% 739 15.7% 5.8% 420 2.6% -462 2012 2013 2014 2015 2012 2013 2014 2015 2012 2013 2014 2015 • At constant fx rates prem
Slide 16: Corporate Solutions manages the cycle and delivers good results
Corporate Solutions manages the cycle and delivers good results Net premiums earned Combined ratio Net income USD m USD m 3 444 3 379 96.2% 340 ROE: 319 2 922 95.1% 279 14.8% 2 284 93.8% 93.0% 196 2012 2013 2014 2015 2012 2013 2014 2015 2012 2013 2014 2015 • Net premiums earned decreased • Net impac
Slide 17: Admin Re achieves strong performance across all metrics
Admin Re® achieves strong performance across all metrics Gross cash generation Return on investments Net income USD m USD m 1 196 423 422 ROE: 7.5% 945 5.1% 4.9% 4.6% 4.7% 521 543 183 34 2012 2013 2014 2015 2012 2013 2014 2015 2012 2013 2014 2015 • Strong underlying 2015 GCG in line • 2015 ROI of 4.
Slide 18: Group investment portfolio provides a strong contribution to the overall result
Group investment portfolio provides a strong contribution to the overall result Average invested assets Return on investments Running yield USD bn, basis for ROI calculation 122.8 115.5 115.4 4.0% 107.2 3.6% 3.7% 3.5% 3.2% 3.2% 3.3% 3.0% 2012 2013 2014 2015 2012 2013 2014 2015 2012 2013 2014 2015 •
Slide 19: Steady reduction in cash and short-term investments, increase in credit expected
Steady reduction in cash and short-term investments, increase in credit expected due to Guardian acquisition 100% 1% 1% 1% 1% 11% 8% 8% 7% 90% Other 80% 33% 35% 38% 70% 44% Equities & alternatives (incl. Principal Investments) 60% Credit investments 50% 40% 32% Government bonds 39% 30% 40% 36% Cash
Slide 20: Well-developed financial risk management in place across the investment portfolio
Well-developed financial risk management in place across the investment portfolio • Group economic net worth (ENW) is Estimated impact on Group shareholders’ equity and ENW measured on a market-consistent USD bn, pre-tax1 valuation basis • Interest rate scenarios show a Change in equity markets -10%
Slide 21: Common shareholders' equity decreased as strong net income was more than offset
Common shareholders' equity decreased as strong net income was more than offset by capital actions, unrealised losses and fx USD m Dividends -2.6 Gov bonds -1.6 Share buy-back -0.4 Corp bonds -1.6 Sec products -0.1 Equities and others -0.4 Tax 1.0 - 3 055 4 597 - 2 678 34 828 - 1 277 32 415 Common s
Slide 22: Business and strategy outlook
Business and strategy outlook Michel M. Liès, Group CEO Annual results 2015 22
Slide 23: Our strategic framework will drive our 2016 priorities
Our strategic framework will drive our 2016 priorities and create long-term value for our shareholders Areas of strategic action Group financial targets I systematically allocate capital to risk pools / ROE ≥ revenue streams risk free + 700bps1 II III broaden optimise maintain capital and diversify
Slide 24: Our strategic framework will also drive our Business Units 2016 priorities
Our strategic framework will also drive our Business Units 2016 priorities I II III IV Corporate Reinsurance Life Capital Solutions • Portfolio steering, • Selective and • Expand access to L&H transactions and profitable growth risk pools underwriting • Expand into Primary • Successfully integrate d
Slide 25: P&C Reinsurance maintains attractive portfolio through January renewals
P&C Reinsurance maintains attractive portfolio through January renewals despite challenging market environment Market developments Premium volume 3% • Experienced rate softening in property and specialty lines with pace of rate decreases slowing down for US nat cat USD 8.6bn USD 8.8bn • Casualty rem
Slide 26: L&H Reinsurance is well positioned to benefit from attractive industry outlook
L&H Reinsurance is well positioned to benefit from attractive industry outlook Market outlook Premiums and fees • Demographic change and more private sector involvement USD bn in welfare provide opportunities • Growth driven mainly by high growth markets, with health 5-year CAGR: 7% insurance remain
Slide 27: Corporate Solutions is well positioned to manage the cycle
Corporate Solutions is well positioned to manage the cycle, with focus on profitable growth Market outlook Gross premiums written1 USD bn • Commercial insurance market is large and fragmented 4 year CAGR: 13% -8% • Market estimated to grow to USD 1trn by 2020, 2015 target range: 4-5 presenting furth
Slide 28: Life Capital is accessing attractive risk pools
Life Capital is accessing attractive risk pools Market outlook Gross cash generation (GCG) USD bn • Attractive growth opportunities based on key trends such as regulatory reforms, technology, changes in distribution channels, efficient capital allocation and 1.4-1.5 protection gaps ≈(0.3) ≈ USD 1.0
Slide 29: High quality portfolio maintained through a disciplined investment process
High quality portfolio maintained through a disciplined investment process Market outlook Swiss Re’s high quality and well diversified • Baseline scenario of moderate global growth with portfolio financial market risks skewed to the downside USD 113.3bn1, end FY 2015 • Active monitoring of monetary
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: Appendix
Appendix • Business segment results Q4 2015 – Income statement • Proposed capital motions for AGM 2016 • Business segment results 2015 – Income statement • Premiums by country • Business segment results 2015 – Balance sheet • Swiss Re is broadly diversified • Total equity and ROE 2015 • Premium deve
Slide 32: Business segment results Q4 2015
Business segment results Q4 2015 Income statement Re- Corporate Admin Group Consoli- Total Total USD m insurance P&C Re L&H Re Solutions Re® items dation Q4 2015 Q4 2014 Revenues Premiums earned 6 572 3 712 2 860 858 92 - - 7 522 7 712 Fee income from policyholders 12 - 12 - 125 - - 137 127 Net inve
Slide 33: Business segment results 2015 – Income statement
Business segment results 2015 Income statement Re- Corporate Admin Group Consoli- Total Total USD m insurance P&C Re L&H Re Solutions Re® items dation FY 2015 FY 2014 Revenues Premiums earned 26 004 15 090 10 914 3 379 368 - - 29 751 30 756 Fee income from policyholders 49 - 49 - 414 - - 463 506 Net
Slide 34: Business segment results 2015 – Balance sheet
Business segment results 2015 Balance sheet Re- Corporate Admin Group Consoli- End End 31 December 2015, USD m insurance P&C Re L&H Re Solutions Re® items dation FY 2015 FY 2014 Assets Fixed income securities 61 122 32 146 28 976 5 888 15 303 18 - 82 331 86 669 Equity securities 3 152 2 231 921 935
Slide 35: Total equity and ROE 2015
Total equity and ROE 2015 Re- Corporate Admin Group Total1 Total1 USD m insurance P&C Re L&H Re Solutions Re® items FY 2015 Q4 2015 Common shareholders' equity2 at 30 September 2015 18 010 12 188 5 822 2 285 5 356 6 976 32 624 2 Common shareholders' equity at 31 December 2014 20 025 13 859 6 166 2 3
Slide 36: P&C Reinsurance – Underwriting performance
P&C Reinsurance Underwriting performance Combined ratio Main drivers of change Net Under- premiums writing Combined ratio earned result FY 2015 FY 2015 FY 2014 FY 2015 USD m USD m Q4 2015 Property 69.7% 73.1% • Both years benefited from benign natural 6 092 1 638 73.8% catastrophe loss experience an
Slide 37: P&C Reinsurance: 2016 renewals
P&C Reinsurance: 2016 renewals Portfolio weighting by line of business and region Gross premium volume, treaty portfolio Up for renewal January Estimated outcome January By line of business 12% 12% Casualty 22% 43% 23% 46% Nat cat Property 1 Specialty 1 23% 19% By region 31% 29% EMEA 42% 50% America
Slide 38: L&H Reinsurance – Operating income movements and adjusted ROE
L&H Reinsurance Operating income movements and adjusted ROE Operating income movements In USD m FY 2014 FY 2015 Life Health L&H Life Health L&H Operating income reported -66 397 331 641 593 1 234 Operating margin, % -0.8 8.6 2.6 7.9 13.8 9.9 Mortality/morbidity experience vs. expected1 200 -62 138 4
Slide 39: Corporate Solutions – Underwriting performance
Corporate Solutions Underwriting performance Combined ratio Main drivers of change Net Under- premiums writing Combined ratio earned result FY 2015 FY 2015 FY 2014 FY 2015 USD m USD m Q4 2015 Property 81.1% 77.0% • 2015 driven by lower large loss frequency 1 240 285 94.4% compared to 2014; no major
Slide 40: Return on investments (ROI)
Return on investments (ROI) Corporate Admin Group Consoli- Total Total Total USD m P&C Re L&H Re Solutions Re® items dation FY 2015 FY 2014 Q4 2015 Investment related net investment income 1 036 1 089 149 656 -70 - 2 860 3 386 626 Fixed income 740 1 052 132 622 1 - 2 547 2 788 644 Equities and alter
Slide 41: Overall investment portfolio
Overall investment portfolio Decrease in short-term investments over the yearOther Cash and Mortgages and investments cash other loans incl. policy equivalents 3% loans 6% Short-term End 8% investments Equities USD bn FY 2015 7% 6% Balance sheet values 146.0 Securitised products Unit-linked investme
Slide 42: Fixed income securities
Fixed income securities Steady allocation driven by ALM and focus on high quality investments Government Credit • Decrease in government bonds USD m bonds bonds reflects mark-to-market losses End arising from higher interest rates FY 2014 48 271 38 398 as well as a negative impact due End FY 2015 45
Slide 43: Equities and alternative investments
Equities and alternative investments Increase in direct real estate investments during 2015 Equity securities Exchange-traded funds by sector Non-Cyclical Consumer Goods End End 3% 2% 1% Information Technology USD m FY 2014 FY 2015 4% 3% Financials 6% Equity securities1 3 184 4 087 37% General Indus
Slide 44: Proposed capital motions for AGM 2016
Proposed capital motions for AGM 2016 Capital motions for AGM 2016 Timing of capital distribution to shareholders 2015 2016 2017 • Increase regular dividend to CHF 4.60 per share - The tax privileged legal reserves from capital contributions have been exhausted with the payment of the 2014 dividends
Slide 45: Premiums by country
Premiums by country 2015 Gross premiums written and fees assessed against policyholders by country1 Total Total USD m Life & Health Non-Life FY 2015 FY 2014 USA 4 907 7 237 12 144 11 261 UK 2 536 953 3 489 3 722 China 145 2 358 2 503 2 723 Australia 1 146 504 1 650 2 098 Germany 180 1 088 1 268 1 45
Slide 46: Swiss Re is broadly diversified
Swiss Re is broadly diversified Swiss Re Group net premiums earned1 2015: USD 30.2bn USD 13.2bn USD 10.3bn USD 6.7bn Americas EMEA Asia 44% 34% 22% of which HGMs: ~3% ~4% ~13% ≈20% HGMs incl. PI2: ~3% ~5% ~17% ≈25% 2020 target of 30% of premiums from HGMs 1 Includes fee income from policyholders; do
Slide 47: Premium development by line of business and geography
Premium development by line of business and geography Premiums earned and fee income by line of business, USD bn • Recent shift from property to 24.3 23.5 20.6 22.2 25.4 28.9 31.3 30.2 casualty continued 10% 9% 11% 11% 12% 12% 13% 13% • Life and health premiums and 35% 37% 36% 34% 31% 28% 26% 26% fe
Slide 48: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 2016 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 29 July Second Quarter 2016 Results Conference call 3 November Third Quarter 2016 Results Con
Slide 49: 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