Swiss Re Ag · SIX:SREN
Swiss Re — Investor Day (November 2005)
34 slides from Swiss Re's investor day presentation, Nov 4, 2005
Slide 1: Investors' presentation
ab Investors’ presentation Zurich 4 November 2005 ab Agenda Topic Presenter Time Welcome and introduction Ann Godbehere 14:00 – 14:02 Introductory video on Asia 14:02 – 14:04 Asia: Achieving scale Pierre Ozendo 14:04 – 14:45 Jean-Michel Chatagny Closing video on Asia 14:45 – 14:47 Q&A Asia Ann Godbe
Slide 2: Cautionary note on forward-looking statements
Cautionary note on ab forward-looking statements Certain statements contained herein are forward-looking. These statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact. Forward-
Slide 3: Asia: Swiss Re's strategic priority
ab Agenda Asia: Swiss Re’s strategic priority Why Asia? Swiss Re is best positioned to further expand its Asian leadership How Swiss Re will leverage its strengths in China & India What this means for the future Investors’ presentation 4 November 2005 Page 5 Swiss Re’s strategic priorities and ab or
Slide 4: The Asian market opportunity
ab Agenda Asia: Swiss Re’s strategic priority Why Asia? Swiss Re is best positioned to further expand its Asian leadership How Swiss Re will leverage its strengths in China & India What this means for the future Investors’ presentation 4 November 2005 Page 7 ab The Asian market opportunity Asia acco
Slide 5: Asian economies will see strong sustained growth
Asian economies will see strong ab sustained growth Real GDP, index 1990=100 CAGR 2006-15 450 5.7% 400 350 4.9% 300 250 200 2.5% 150 100 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Investors’ presentation Industria
Slide 6: New opportunities for Swiss Re in Asia
… thus creating new opportunities ab for Swiss Re in Asia Increasing trade and investment Casualty/liability demand Property Underinsured small and medium sized & enterprises Skills shortage Casualty Opportunities Heightened nat cat awareness Training Challenges e-business opportunities requirements
Slide 7: Swiss Re is best positioned to further extend leadership in Asia
Swiss Re is best positioned to ab further extend leadership in Asia Swiss Re premiums worldwide (2004) 1 Recognised strong position throughout Asia Total CHF 29.4 billion 10% 2 Best speed-to-market capabilities in the region 40% 3 Able to influence key market developments 50% 4 Active investor in th
Slide 8: Best speed-to-market capabilities in Asia
2. Swiss Re has the best speed-to- ab market capabilities in Asia Branches 8 As at end Sept 2005 Offices 13 Full time employees: Zurich 54 Asia Division (2) : 623 Seoul 21 Beijing 30 Shanghai 5 Tokyo 58 Full time employees: SSC Bangalore(1): 211 Hong Kong (HQ) 155 Taipei 23 Mumbai 23 (Services P&C,
Slide 9: Commitment to Asia's industry future
4. Swiss Re is well-known for its ab commitment to Asia’s industry future Natural Catastrophe Swiss Re Asia Forum: UNDP Natural Disaster Swiss Re Training Atlas of China: first in 6th year. CEO Mitigation study Centre Hong Kong: digital source on China discussion forum on (Vietnam); CIRC panels open
Slide 10: Emerging markets growing rapidly
ab Agenda Asia: Swiss Re’s strategic priority Why Asia? Swiss Re is best positioned to further expand its Asian leadership How Swiss Re will leverage its strengths in China & India What this means for the future Investors’ presentation 4 November 2005 Page 19 ab Emerging markets growing rapidly 90 0
Slide 11: Attractive growth opportunities in emerging markets
Attractive growth opportunities in ab emerging markets Step change in demand function. Premiums per GDP, life and non-life, 2004 When GDP per capita gets close 12% to USD 10 000, insurance penetration rises to a level above 10% United States 4% with a steep slope South Korea 8% Compulsory insurance
Slide 12: China market drivers offer opportunities for Swiss Re
China market drivers offer ab opportunities for Swiss Re Natural catastrophe coverage including pools Growth of environmental concerns Policy-driven growth in liability and motor business Further market reforms and corporate governance Market Capital market development and expansion drivers The cons
Slide 13: Swiss Re's initiatives will capture new opportunities in China
Swiss Re’s initiatives will capture ab new opportunities in China Market liberalisation Risk awareness Partnership with Agriculture/ Start-ups quota shares/ e-Business large projects motor Personal Alternative Mortality accident, health Liability distribution & living benefits Wealth accumulation De
Slide 14: India: key market drivers that impact Swiss Re's strategy
India: key market drivers that impact ab Swiss Re’s strategy Regulatory requirements moving towards liberalisation National insurers dominate with 80% market share New entrants/JV companies expanding rapidly Market drivers Discontinuation of P&C tariff by end of 2006 Natural catastrophe covers and p
Slide 15: Portfolio of initiatives to capture opportunities in India
Swiss Re has a portfolio of initiatives to capture new ab opportunities in India Market liberalisation Risk awareness Share of Wallet Engineering/ Agriculture/ (existing clients) construction rural coverages Alternative Living benefits Microfinance distribution Wealth accumulation De-socialisation P
Slide 16: Asia will become a major contributor to Swiss Re's revenues
Asia will become a major ab contributor to Swiss Re‘s revenues Primary market premium projections to 2015 2005E 2015 34% 41% 44% 57% P&C premiums 9% 15% USD 161bn USD 321bn Japan, Rest of Australia 32% Asia & New 35% 60% L&H premiums Zealand 47% 8% China Investors’ presentation USD 477bn 18% 4 Novem
Slide 17: Catastrophe perils: Under the weather?
ab Asia: Achieving scale – Q&A Investors’ presentation 4 November 2005 Page 33 ab Catastrophe perils: Under the weather? Brian Gray Head of Property & Specialty
Slide 18: 2005 weather claims
ab Agenda Historic profitability Climate variability A growth business Swiss Re’s strong position Investors’ presentation 4 November 2005 Page 35 ab 2005 weather claims Estimated Swiss Re claims above CHF 20 million Katrina, Rita, Wilma USD 1 950 million Other weather events CHF 450 million (Califor
Slide 19: Historic worldwide cat XL profitability
ab Historic worldwide cat XL profitability Estimated premium and claim history 1994 - 2005 CHF bn CHF bn 20 70 18 CAMARES markets (15 markets) 60 16 Premium is shown after deducting external costs 14 50 uncertain 12 40 10 30 8 6 20 4 10 2 0 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 20
Slide 20: Market prices increase sharply after events: Windstorm France
Market prices increase sharply ab after events: Windstorm France 160 99% 140 120 100 Storms Lothar & Martin 80 17% 60 5% 40 -3% -2% -6% -17% -15% 20 -20% 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 relative change of price level price index (1996=100) Investors’ presentation Lothar and Marti
Slide 21: Climate variability
ab Climate variability Above-normal hurricane activity in last decade Investors’ presentation 4 November 2005 Page 41 ab Climate variability More hurricanes striking U.S. mainland Number of hurricanes making U.S. landfall (per year, 1900-2005) 7 6 1943 – 69 average: 2.0 1970 – 94 average: 1.2 5 1995
Slide 22: North Atlantic hurricane model changes
ab North Atlantic hurricane Model changes Swiss Re’s model (and others) have modelled storm frequency and intensity based on long-term averages There is growing scientific evidence that activity in the North Atlantic varies between ‘more active’ and ‘less active’ periods, and that since the late 199
Slide 23: Tackling our own footprint
Tackling our own footprint ab Swiss Re’s commitment to become greenhouse neutral The 10 year programme (2003-2013) combines a 15% internal emissions reduction with investments in the World Bank Community Development Carbon Fund (CDCF). Increasing accountability for CO2 emissions 15% reduction CO2 em
Slide 24: The traditional catastrophe market is a strongly growing business segment
The traditional catastrophe market ab is a strongly growing business segment CAGR over the past 11 years is 9.4% Total reinsurance cover purchased in 15 prime markets (in CHFbn, at today’s exchange rates) 140 120 100 80 60 40 20 Investors’ presentation 0 4 November 2005 1994 1995 1996 1997 1998 1999
Slide 25: Renewals: Swiss Re demonstrates leadership
ab Renewals: Swiss Re demonstrates leadership Stefan Lippe, Head of Products Michel Liès, Head of Client Markets ab Agenda Changing risk landscape offers opportunities to Swiss Re Where do we stand in the cycle? Cycle management Swiss Re is excellently positioned for 2006 renewals Investors’ present
Slide 26: The risk landscape is changing - opportunities for strong players
ab The risk landscape is changing - opportunities for strong players 5 major hurricanes in 2005, including highest ever insured loss 2 major storms and floods in Europe in 2005 Major typhoons in 2004 Tsunami in 2004 4 major hurricanes in 2004 Pharma claims Financial Institutions D&O Investors’ prese
Slide 27: Large commercial risks
ab Large commercial risks Katrina expected to lead to significant price increases Large commercial risks Katrina: which lines are affected? have been impacted USD billions low high significantly by Katrina and Industry loss 39.9 54.6 related flooding/storm split by market segment surge; recent price
Slide 28: Conclusions for 2006 renewals
ab Conclusions for 2006 renewals Changes to Swiss Re’s hurricane model to reflect flood and storm surge are implemented and in the market Swiss Re will write pharma business selectively and on facultative basis with specific endorsements securing aligned interests between insured and (re)insurer Swi
Slide 29: Cycle management: monitoring rate adequacy
ab Cycle management Monitoring rate adequacy Renewal Tracking Tool provides real time information on quotes and pricing levels worldwide and thus enables management to actively steer the business Investors’ presentation 4 November 2005 Page 57 ab Cycle management Monitoring qualitative trends Traffi
Slide 30: Swiss Re is excellently positioned for the 2006 renewals
Swiss Re is excellently positioned ab for the 2006 renewals Business conditions have been favourable for the last 4 years, outlook is positive for all lines of business Retrocession prices are soaring (up to 3 times higher) net writers are in the driving seat Swiss Re as a net writer can maximise th
Slide 31: Organisation aligned to strategic priorities
Organisation aligned to strategic ab priorities effective as per 12 Sept 2005 Growth Asia Accelerate the balance Cycle management sheet Products Client Markets Financial Services Optimise capital Link client segmentation to cycle Continuous allocation based on position emphasis on asset uniform pric
Slide 32: Strong share in key P&C markets in Asia
Swiss Re has a strong share in key ab P&C markets in Asia 25% Australia CHF 100 Swiss Re market share 2004 20% million in SR 2004 premium Singapore 15% Vietnam Hong Kong 10% China Philippines Malaysia Japan Saudi Arabia Taiwan 5% U.A.E. Turkey India Indonesia South Korea Egypt Thailand New Zealand 0
Slide 33: Pre-Katrina nat cat prices were declining
CAMARES ab Pre-Katrina nat cat prices were declining, but still above cycle reference Annual premium level change in % 140 26% 120 25% 100 11% 80 60 0% -7% -6% 40 -8% -12% -15% 20 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 relative change (market) market index While prices remained under pr
Slide 34: Historic nat cat events
ab Historic nat cat events Top 5 nat cat insurance losses 1990 - 2004 Ins. loss Date Event Country USD billions* 1. 21.5 08/92 Hurricane Andrew US 2. 17.8 01/94 Earthquake Northridge US 3. 11.0 09/04 Hurricane Ivan Caribbean/US 4. 8.0 08/04 Hurricane Charley Caribbean/US 5. 7.8 09/91 Typhoon Mireill