Swiss Re Ag · SIX:SREN
Swiss Re — 9M 2022 Earnings Presentation
32 slides from Swiss Re's earnings presentation, Oct 28, 2022
Slide 1: 9M 2022 Results
9M 2022 Results Swiss Re investor and analyst presentation Zurich, 28 October 2022
Slide 2: 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% 1 258 P&C Net income Reinsurance Normalised4 (USD m) combin
Slide 3: Corporate Solutions on track for combined ratio target; P&C Re hit by nat cat losses
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 4: Actions taken on inflation offset positive reserve development of broader P&C portfolio
Actions taken on inflation offset positive reserve development of the broader P&C portfolio P&C prior-year technical result1, USD bn -1.3 -0.2 0.5 -0.3 1.5 Adverse prior-year reserve development in 9M 2022 driven by the 1.0 combination of ‐ Inflation IBNR reserves2 of USD 0.7bn affecting property, s
Slide 5: L&H Reinsurance with strong results for 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 6: 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 7: L&H Re and Corporate Solutions on track for full-year targets; P&C Re and Group ROE unlikely
L&H Reinsurance and Corporate Solutions well on track to achieve full-year targets; P&C Reinsurance and Group ROE targets unlikely to be met FY 2022 segment targets FY 2022 Group targets P&C Reinsurance <94% normalised1 combined ratio 10% US GAAP return on equity L&H Reinsurance USD ~300m net income
Slide 8: Transitioning from US GAAP to IFRS in 2024 expected to be beneficial
Transitioning from US GAAP to IFRS in 2024 expected to be beneficial for Swiss Re, providing a better reflection of the underlying economics Group shareholders’ equity, CSM and RA 1 • IFRS 17 brings new accounting framework closer to our economic framework EVM 60 illustrative 50 Risk Adjustment (RA)
Slide 9: Financial highlights
Financial highlights 9
Slide 10: Key figures
Key figures Corporate Total Total USD m, unless otherwise stated P&C Re L&H Re Solutions Group items 9M 2022 9M 2021 • Premiums earned and fee income 16 606 11 202 4 125 433 32 366 31 950 • Net income/loss - 283 221 356 - 579 - 285 1 258 • Return on investments 1.3% 3.0% 1.3% - 5.0% 1.6% 3.0% • Comb
Slide 11: P&C Reinsurance underwriting performance impacted by elevated claims activity
P&C Reinsurance underwriting performance impacted by elevated claims activity Net premiums earned Net operating margin1 (%) Combined ratio (%) Reported Normalised3 114.1 110.3 -11.8pts 106.1 11.3 100.4 101.4 99.5 97.5 USD 16.6bn 7.2 99.7 98.3 98.2 96.5 96.2 93.8 94.0 in 9M 2022 9M 2016 9M 2017 9M 20
Slide 12: L&H Reinsurance rebound in profitability, supported by lower COVID-19 impacts
L&H Reinsurance rebound in profitability, supported by lower COVID-19 impacts Net premiums earned Net operating margin1 (%) Recurring income yield3 and ROI (%) and fee income 3.4 3.4 3.4 +2.1pts 3.3 3.1 3.0 2.9 1.4 3.5 3.6 4.1 3.7 4.1 3.7 3.4 3.0 USD 11.2bn 11.0 9.5 9M 2016 9M 2017 9M 2018 9M 2019 9
Slide 13: Corporate Solutions continues to deliver resilient results
Corporate Solutions continues to deliver resilient results Net premiums earned Net operating margin1 (%) Combined ratio (%) 142.6 127.0 -2.3pts 116.0 13.4 11.1 105.4 99.3 USD 4.1bn 91.1 93.1 23.0 20.2 9M 2016 9M 2017 9M 2018 9M 2019 9M 20202 9M 2021 9M 2022 in 9M 2022 4.9 4.5 • 9M 2022 combined rati
Slide 14: Positive impact from higher interest rates on recurring income; equity decline hit investment result
Significant positive impact from higher interest rates on recurring income, while the decline in global equity markets impacted the overall investment result Return on investments (ROI) Investment portfolio positioning (USD bn) Net investment income (USD m) 119.3 Recurring income yield2 (%) 0.3 14.5
Slide 15: Appendix
Appendix 15
Slide 16: Business segment results 9M 2022
Business segment results 9M 2022 Income statement Corporate Total Total USD m Reinsurance P&C Re L&H Re Solutions Group items Consolidation 9M 2022 9M 2021 Revenues Gross premiums written 31 785 19 802 11 983 5 948 663 - 820 37 576 35 910 Net premiums written 29 797 18 895 10 902 4 431 362 34 590 33
Slide 17: Business segment results Q3 2022
Business segment results Q3 2022 Income statement Corporate Total Total USD m Reinsurance P&C Re L&H Re Solutions Group items Consolidation Q3 2022 Q3 2021 Revenues Gross premiums written 9 288 5 454 3 834 1 718 199 - 232 10 973 10 842 Net premiums written 8 720 5 244 3 476 1 164 124 10 008 10 084 C
Slide 18: Business segment results 9M 2022 - Balance sheet
Business segment results 9M 2022 Balance sheet Corporate End End 30 September 2022, USD m Reinsurance P&C Re L&H Re Solutions Group items Consolidation 9M 2022 FY 2021 Assets Fixed income securities 65 322 39 223 26 099 8 046 503 73 871 86 985 Equity securities 1 333 1 060 273 110 485 1 928 3 978 Ot
Slide 19: Total equity and ROE 9M 2022
Total equity and ROE 9M 2022 USD m 9M 2022 Shareholders' equity at 31 December 2021 23 568 Net income attributable to shareholders - 285 Dividends and share buyback - 1 825 Net change in unrealised gains/losses - 9 949 Other (incl. fx) 401 Shareholders' equity at 30 September 2022 11 910 Non-control
Slide 20: Change in shareholders' equity mainly driven by net unrealised investment losses and dividend
Change in shareholders' equity mainly driven by net unrealised investment losses and dividend payment USD m Gov bonds -6.5 Corp bonds -5.2 Sec products -0.3 Other -0.4 Tax 2.5 - 285 23 568 - 1 825 - 9 949 401 11 910 Shareholders' Net loss Dividends Net change in Other 1 Shareholders' equity attribut
Slide 21: P&C underwriting performance
P&C underwriting performance P&C Reinsurance and Corporate Solutions Combined ratio Main drivers of change year-to-date Net premiums earned (USD m) P&C Reinsurance Q3 2021 Q3 2022 9M 2021 9M 2022 Q3 2022 9M 2022 Property 102.8% 127.0% 94.0% 110.4% • Deterioration impacted by elevated large nat cat l
Slide 22: P&C Reinsurance: combined ratio split
P&C Reinsurance: combined ratio split Quarterly performance (%) Year-to-date performance (%) Main drivers of change year-to-date 119.5 120 120 115 115 • Current accident year (CAY) loss ratio excl. large losses 110 110 increased vs. prior-year period due to higher small- to mid- 106.1 105 103.0 28.0
Slide 23: Corporate Solutions: combined ratio split
Corporate Solutions: combined ratio split Quarterly performance (%) Year-to-date performance (%) Main drivers of change year-to-date 91.1 100 92.9 100 88.3 0.2 93.1 95 95 7.3 7.6 3.2 • Current accident year (CAY) loss ratio excl. large losses 9.4 90 90 5.4 4.5 benefitted from improved portfolio resi
Slide 24: Return on investments (ROI) 9M 2022
Return on investments (ROI) 9M 2022 Corporate Total Total USD m P&C Re L&H Re Solutions Group items Consolidation 9M 2022 9M 2021 Investment related net investment income 828 745 161 113 -192 1 655 2 151 Fixed income 524 703 118 10 - 1 355 1 307 Equities and alternative investments – incl. RE PE HF
Slide 25: Return on investments (ROI) Q3 2022
Return on investments (ROI) Q3 2022 Corporate Total Total USD m P&C Re L&H Re Solutions Group items Consolidation Q3 2022 Q3 2021 Investment related net investment income 319 248 85 57 -71 638 621 Fixed income 195 232 42 4 - 473 420 Equities and alternative investments – incl. RE PE HF 123 -6 36 10
Slide 26: Overall investment portfolio
Overall investment portfolio Other investments (incl. policy loans) Cash and cash equivalents Short-term investments 8% 4% Mortgages and other loans 8% 4% Equities 6% 37% Government bonds 33% Credit bonds Corporate End End USD bn P&C Re L&H Re Solutions Group items Consolidation 9M 2022 FY 2021 Cash
Slide 27: Fixed income securities
Fixed income securities Government Credit USD m bonds bonds End FY 2021 47 205 39 780 End 9M 2022 39 400 34 471 3% 5% 8% 14% 2% 4% • Decrease in fixed income securities reflects the 3% impact of rising interest rates as well as credit 3% 4% spread widening, partially offset by net purchases 52% 31%
Slide 28: Equities and alternative investments
Equities and alternative investments Equity securities ETF, excl. fixed income by sector 1% Non-Cyclical consumer goods 2% 1% End End 3% Financials USD m FY 2021 9M 2022 5% Information technology 9% Equity securities 2 739 1 470 28% Cyclical services General industrials Private equity 3 054 3 403 13
Slide 29: 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 30: 9M 2022 Results
@ Swiss Re 9M 2022 Results
Slide 31: 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 32: 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