Swiss Re Ag · SIX:SREN
Swiss Re — H1 2021 Earnings Presentation
33 slides from Swiss Re's earnings presentation, Jul 30, 2021
Slide 1: Half-year 2021 Results
Half-year 2021 Results Swiss Re investor and analyst presentation Zurich, 30 July 2021
Slide 2: Focus areas of half-year 2021 results
Focus areas of half-year 2021 results Earnings in Renewals Leadership in context update sustainability Half-year 2021 Results 2
Slide 3: Portfolio actions in P&C Reinsurance and Corporate Solutions' turnaround delivered strong H1 2021 results
Portfolio actions in P&C Reinsurance and Corporate Solutions' turnaround delivered strong H1 2021 results Swiss Re Group Net income/loss (USD m) H1 2021 key figures H1 2021 segment view P&C 94.4% +7.6% Reinsurance Combined ratio 1 046 Premium1 growth -3.7% 3.2% Return on equity2 Return on investment
Slide 4: Strong underwriting performance of both P&C businesses, supported by portfolio actions taken
Strong underwriting performance of both P&C businesses, supported by portfolio actions taken P&C Reinsurance – combined ratio Corporate Solutions – combined ratio Reported Normalised1 Reported Normalised1 135% 135% 130% 130% 125% 125% 120% 120% Combined ratio Combined ratio 115% 115% 110% 110% 105%
Slide 5: L&H Reinsurance franchise has weathered the pandemic with good underlying profitability
L&H Reinsurance franchise has weathered the pandemic with good underlying profitability L&H Reinsurance – premiums L&H Reinsurance – profitability H1 H2 Reported Excl. COVID-19 14 16% 12 15.5% 12% 10-12% target range 10 8 7.5 8% Premiums1 Return on (USD bn) 6 equity 4% 4 0% 2 -3.7% 0 -4% FY 16 FY 17
Slide 6: COVID-19 losses incurred in half-year 2021 were primarily driven by elevated mortality levels in the US
COVID-19 losses incurred in half-year 2021 were primarily driven by elevated mortality levels in the US Minimal exposure for Swiss Re due to infectious Business closings in Europe1 (number of countries) disease exclusions 30 25 20 15 10 5 0 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Closing of all-but esse
Slide 7: Diminishing COVID-19-related impacts, continued high levels of IBNR in business interruption
Diminishing COVID-19-related impacts, continued high levels of IBNR in business interruption Swiss Re’s reported COVID-19 losses to-date (USD m, pre-tax) 512 4 749 4 749 IBNR Paid & case reserves 1 752 5% Q2 21 14% Q1 21 43% 19% Q4 20 246 9% Q3 20 1 431 57% 43% Q2 20 808 10% Q1 20 Event cancellation
Slide 8: Attractive price increases and targeted portfolio changes achieved in YTD renewals
Attractive price increases and targeted portfolio changes achieved in YTD renewals Nominal price change +4% • 85% of Swiss Re’s reinsurance Higher loss assumptions -1% treaty business has renewed USD bn Lower interest rates -1% year-to-date Premium change 0% • Attractive core business 16.1 1.8 16.1
Slide 9: YTD renewals reflect a disciplined focus on underwriting quality and selective growth
YTD renewals reflect a disciplined focus on underwriting quality and selective growth Gross premium volume by line of business1 (USD bn) Gross premium volume by region1 (USD bn) Up for Premium Estimated Price Up for Premium Estimated renewal YTD change outcome YTD change3 renewal YTD change outcome
Slide 10: Swiss Re drives sustainability leadership
Swiss Re drives sustainability leadership Recent highlights Adding ambitious • Carbon intensity reduction target for our investment portfolio of 35% by 20251 carbon reduction targets • Full phase-out of thermal coal in treaty re/insurance by 2030 (OECD) and 2040 (rest of the world) Succeeding with •
Slide 11: Financial highlights
Financial highlights
Slide 12: Key figures
Key figures Corporate Total Total USD m, unless otherwise stated P&C Re L&H Re Solutions Group items H1 2021 H1 2020 • Premiums earned and fee income 10 453 7 518 2 555 274 20 800 19 329 • Net income/loss 1 248 - 119 262 - 345 1 046 -1 135 • Return on investments 3.5% 3.2% 2.3% 0.4% 3.2% 3.2% • Retu
Slide 13: P&C Reinsurance delivered very strong results
P&C Reinsurance delivered very strong results Net premiums earned Net operating margin1 (%) Combined ratio (%) 115.8 +19.7pts 100.5 100.5 14.7 97.2 97.4 92.9 94.4 88.3 93.9 USD 10.5bn 10.3 excl. COVID-19 -5.0 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 H1 2021 in H1 2021 9.3 9.5 -5.1 • H1 2021 l
Slide 14: L&H Reinsurance continues to show good underlying profitability
L&H Reinsurance continues to show good underlying profitability Net premiums earned Net operating margin1 (%) Recurring income yield2 and ROI (%) and fee income 3.5 3.5 3.4 3.3 3.4 3.1 2.9 -4.0pts 3.9 4.2 4.4 4.1 3.6 3.8 3.6 3.2 USD 7.5bn -0.1 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 H1 2021
Slide 15: Corporate Solutions continues its resurgence with high profitability
Corporate Solutions continues its resurgence with high profitability Net premiums earned Net operating margin1 (%) Combined ratio (%) 132.8 +27.4pts 118.7 12.7 104.5 101.6 101.7 98.8 91.7 92.7 USD 2.6bn excl. COVID-19 21.8 92.6 H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 H1 20202 H1 2021 in H1 2021 -14.
Slide 16: iptiQ result reflects dynamic growth and higher gross income
iptiQ result reflects dynamic growth and higher gross income Gross income1 (USD m) Earnings before interest Gross premiums written2 (USD m) and tax (EBIT) 333 +53% CAGR 99% 26 USD -114m 42 95 143 17 in H1 2021 H1 2018 H1 2019 H1 2020 H1 2021 USD-84m 21 • Gross premiums written increased 133% year-on
Slide 17: Good investment result from recurring income and equity valuations
Good investment result from recurring income and equity valuations Return on investments (ROI) Investment portfolio positioning (USD bn) Net investment income (USD m) Recurring income yield1 (%) 122.4 118.4 21.6 3.0 3.0 2.9 2.9 2.9 17.0 3.2% 2.5 2.3 47.4 46.1 1 686 1 560 1 609 in H1 2021 1 518 1 521
Slide 18: Appendix
Appendix
Slide 19: Business segment results H1 2021
Business segment results H1 2021 Income statement Corporate Total Total USD m Reinsurance P&C Re L&H Re Solutions Group items Consolidation H1 2021 H1 2020 Revenues Gross premiums written 21 543 13 478 8 065 3 667 361 - 503 25 068 23 558 Net premiums written 20 314 12 943 7 371 2 764 251 - 23 329 21
Slide 20: Business segment results H1 2021
Business segment results H1 2021 Balance sheet Corporate End End 30 June 2021, USD m Reinsurance P&C Re L&H Re Solutions Group items Consolidation H1 2021 FY 2020 Assets Fixed income securities 73 852 41 586 32 266 8 546 1 777 - 84 175 83 018 Equity securities 2 485 1 876 609 257 1 480 - 4 222 4 899
Slide 21: Total equity and ROE H1 2021
Total equity and ROE H1 2021 Corporate Total USD m Reinsurance P&C Re L&H Re Solutions Group items H1 2021 Shareholders' equity at 31 December 2020 16 549 9 168 7 381 2 427 8 159 27 135 Net income attributable to shareholders 1 129 1 248 - 119 262 - 345 1 046 Dividends and share buyback - 500 - - 50
Slide 22: Change in shareholders' equity mainly driven by net unrealised investment losses and dividend payments
Change in shareholders' equity mainly driven by net unrealised investment losses and dividend payments, partially offset by net income USD m Gov bonds -2.1 Corp bonds -0.8 Sec products 0.0 Other -0.2 1 046 Tax 0.6 -1 855 27 135 -2 491 -30 23 805 Shareholders' Net income Dividends Net change in Other
Slide 23: P&C underwriting performance
P&C underwriting performance P&C Reinsurance and Corporate Solutions Combined ratio Main drivers of change Net premiums Underwriting earned result H1 2021 H1 2021 P&C Reinsurance H1 2020 H1 2021 USD m USD m Property 120.4% 87.6% • Strong result despite large nat cat losses from US winter storm Uri a
Slide 24: P&C Reinsurance and Corporate Solutions: combined ratio split
P&C Reinsurance and Corporate Solutions: combined ratio split P&C Reinsurance (%) Corporate Solutions (%) 118.7 115.8 110 15.3 110 19.9 92.7 100 94.4 100 0.1 5.6 2.0 6.1 0.5 0.5 3.2 3.3 5.0 4.3 90 1.0 90 6.2 15.4 5.6 15.9 80 80 70 26.0 25.2 70 14.0 12.1 60 60 58.9 64.8 62.7 57.9 0 -0.8 0 -0.6 -8.5 -
Slide 25: Return on investments (ROI)
Return on investments (ROI) Corporate Total Total USD m P&C Re L&H Re Solutions Group items Consolidation H1 2021 H1 2020 Investment related net investment income 768 498 70 289 -95 1 530 894 Fixed income 297 484 71 35 - 887 982 Equities and alternative investments – incl. RE, PE, HF 515 22 3 211 -
Slide 26: Overall investment portfolio
Overall investment portfolio Other investments (incl. policy loans) Cash and cash equivalents Mortgages and other loans 7% 7% Short-term investments 3% 7% Equities 7% Credit bonds 30% 39% Government bonds Corporate End End USD bn P&C Re L&H Re Solutions Group items Consolidation H1 2021 FY 2020 Cash
Slide 27: Fixed income securities
Fixed income securities Government Credit USD m bonds bonds End FY 2020 49 125 33 893 End H1 2021 47 631 36 545 • Decrease in government bonds driven by market 5% 3% value losses, reflecting the impact of rising interest 7% 2% 15% 4% rates, partially offset by net purchases 3% 4% 43% • Increase in c
Slide 28: Equities and alternative investments
Equities and alternative investments Equity securities Non-cyclical consumer goods by sector Information technology 1% End End 3% 3% 1% Financials USD m FY 2020 H1 2021 4% ETF, excl. fixed income 7% 18% Equity securities 2 472 2 814 Cyclical services General industrials Private equity 2 005 2 537 15
Slide 29: Sensitivities
Sensitivities (USD bn, pre-tax) Change in market values (Equities and Alternative Investments, excl. Real Estate) -25% -10% +25% Estimated impact on shareholders' equity -1.9 -0.8 +1.9 Estimated impact on economic net worth (EVM) -1.9 -0.8 +1.9 Estimated impact on income/loss before income tax expen
Slide 30: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 2021 29 October 9M 2021 Key Financial Data Conference call Investor Relations contacts Hotline E-mail +41 43 285 44 44 Investor_Relations@swissre.com Thomas Bohun Olivia Brindle Deborah Gillott +41 43 285 81 18 +41 43 285 64 37 +41 43 285 25 15 Daniel
Slide 31: Half-year 2021 Results
(in) Swiss Re Halfsyear 2021 Results 31
Slide 32: Forward-looking statements disclaimer
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 any statement that does not directly relate to
Slide 33: Copyright and 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 commercial or