Slide 1: Annual results 2017
Annual results 2017 Investor and analyst presentation Zurich, 23 February 2018
Slide 2: Today's agenda
Today’s agenda • Key achievements • 2017 financial performance • Business outlook for 2018 Annual results 2017 2
Slide 3: Key achievements
Key achievements Annual results 2017 3
Slide 4: In 2017 we supported our clients and their customers in the aftermath of large losses
In 2017 we supported our clients and their customers in the aftermath of large losses USD 4.7bn estimated claims from nat cat events 190 claims managers assessing the damages Swiss Re’s employees assessed losses on site in multiple loss-affected areas after the occurrence of the 2017 natural catastr
Slide 5: In a challenging year Swiss Re also achieved multiple successes
In a challenging year Swiss Re also achieved multiple successes Superior capital strength enabling full Focus on underwriting discipline execution of share buy-back maintained in challenging P&C market and attractive new capital actions Continued emergence of strong Strong investment performance and
Slide 6: 2017 financial performance
2017 financial performance Annual results 2017 6
Slide 7: Diversification of earnings streams supported Swiss Re's 2017 result
Diversification of earnings streams supported Swiss Re’s 2017 result Swiss Re Group • Swiss Re reports Group net income of USD 331m despite large natural catastrophes • Group investment portfolio delivers a very strong ROI of 3.9% alongside a steady running yield • Group economic solvency remains ve
Slide 8: Key figures
Key figures Corporate Total Total USD m, unless otherwise stated P&C Re L&H Re Life Capital Group items Solutions FY 2017 FY 2016 • Gross premiums written 16 544 13 313 4 193 1 761 - 34 775 35 622 • Premiums earned and fee income 16 667 11 980 3 651 1 407 - 33 705 33 231 • EBIT -239 1 815 -926 298 3
Slide 9: P&C Reinsurance result impacted by significant natural catastrophe losses
P&C Reinsurance result impacted by significant natural catastrophe losses Gross premiums written EBIT Net income USD m USD m USD m 20 000 18 149 5 000 4 392 4 000 3 564 18 000 16 650 16 099 16 544 4 000 3 751 3 500 3 008 16 000 3 000 14 000 3 000 2 890 2 500 2 100 12 000 2 000 10 000 2 000 1 500 8 0
Slide 10: L&H Reinsurance delivers another year of strong performance
L&H Reinsurance delivers another year of strong performance Gross premiums written EBIT Net income USD m USD m USD m 14 000 12 434 12 801 13 313 2 000 1 815 1 200 1 092 11 942 968 12 000 1 500 1 492 1 350 1 000 800 807 10 000 600 1 000 8 000 400 6 000 500 200 -462 4 000 -38 0 -200 0 2 000 -400 0 -50
Slide 11: Corporate Solutions' result impacted by significant natural catastrophe losses
Corporate Solutions’ result impacted by significant natural catastrophe losses Gross premiums written1 EBIT Net income USD m USD m USD m 4 500 4 209 4 100 4 091 517 4 000 3 875 500 505 400 319 357 3 500 157 200 135 3 000 0 0 2 500 -200 2 000 -500 -400 1 500 -600 -926 1 000 -1 000 -741 500 -800 0 -1
Slide 12: Life Capital generates strong gross cash and continues to grow in open books
Life Capital generates strong gross cash and continues to grow in open books Gross premiums written EBIT Net income USD m USD m USD m 2 000 1 800 1 761 900 800 798 700 638 1 489 600 1 600 1 346 700 424 1 400 500 600 1 200 417 500 400 1 000 827 298 400 300 800 161 300 600 200 200 34 400 7 100 200 100
Slide 13: Group investment portfolio delivers a very strong ROI alongside a steady running yield
Group investment portfolio delivers a very strong ROI alongside a steady running yield Average invested assets Return on investments Running yield USD bn, basis for ROI calculation 140 115.4 116.3 115.9 120 107.2 3.9% 3.7% 100 3.5% 3.4% 3.3% 80 3.0% 2.9% 2.9% 60 40 20 0 2014 2015 2016 2017 2014 2015
Slide 14: Change in shareholders' equity mainly driven by dividend payments and share buy-back
Change in shareholders' equity mainly driven by dividend payments and share buy- back USD m Gov bonds 0.0 Corp bonds 0.5 Sec products 0.1 Equities and 331 others -0.3 34 532 Tax 0.0 -2 629 850 33 374 290 Dividends -1.5 Share buy-back -1.1 2 3 Common shareholders' Net income Dividends and share buy-b
Slide 15: Swiss Re continues to focus on Group and Business Unit targets
Swiss Re continues to focus on Group and Business Unit targets Group targets over-the-cycle Group Return on Equity Group ENW per share growth2 13.7% 13.7% 24.6% 13.4% 17.0% 10.5% 10.6% 9.6% 11.0% 9.4% 9.4% 9.4% Rf + 8.8% 9.2% 700 10% 10% 7.2% 10% 10% 10% 10% 10% 5.4% bps1 1.0% 2012 2013 2014 2015 20
Slide 16: Business outlook for 2018
Business outlook for 2018 Annual results 2017 16
Slide 17: Improved outlook for P&C Reinsurance following January 2018 treaty renewals
Improved outlook for P&C Reinsurance following January 2018 treaty renewals Premium volume, 1/1 renewals1 USD bn +8% Price increase of 8.1 7.5 2% 1.6 2.0 Asia 1.8 2.1 Americas Higher rates 4.1 4.0 EMEA across all major lines of business Up for renewal Estimated outcome and regions • Volume up 8% in
Slide 18: L&H Reinsurance will continue to pursue growth in high growth markets and large transactions
L&H Reinsurance will continue to pursue growth in high growth markets and large transactions Premiums and fees (USD bn) % of 2017 EVM New Business Underwriting profit from large and tailored transactions +6% CAGR Diversified 12 business mix 10 25% supporting 8 sustainable 16% 28% 6 profitability 40%
Slide 19: Corporate Solutions expects to benefit from overall market recovery
Top player in Corporate Solutions expects to benefit from Excess Layers overall market recovery market and expanding into Primary Lead Global composite renewal rate changes 4.0% 2.0% 0.0% -2.0% -4.0% Start of JV with -6.0% 1 2012 2012 2 3 4 1 2013 2013 2 3 4 1 2014 2014 2 3 4 1 2015 2015 2 3 4 1 201
Slide 20: Life Capital to continue growing across closed and open book portfolios
MS&AD Life Capital to continue growing across participation increases ability closed and open book portfolios to pursue further closed book transactions Closed book business outlook • Key regulatory and demographic trends to support strong growth outlook Part VII transfer • Attractive deal pipeline
Slide 21: Investment portfolio well positioned for future returns
Investment portfolio well positioned for future returns, building on a successful track record Solid 2018 global economic Recent investment performance results growth outlook 3.7% 3.5% 3.9% 4% 3.4% 3% 3.3% 3.0% 2.9% 2.9% 2% Enhanced income with low 1% duration risk 2014 2015 2016 2017 • Global econo
Slide 22: Swiss Re proposes another set of attractive capital management actions
Swiss Re proposes another set of attractive capital management actions 3% increase of the regular • The Board of Directors will propose to the AGM 2018 a regular dividend of dividend to CHF CHF 5.00 per share (3% increase) 5.00 per share • The Board will also propose to the AGM a further public shar
Slide 23: Swiss Re remains fully committed to maintaining its leadership in sustainability
Swiss Re remains fully committed to maintaining Co-led and its leadership in sustainability placed first-ever World Bank pandemic bond Sustainability approach highlights External recognition • Integration of FSB climate- related financial disclosure into AAA-rating (May 2017) 2017 Financial Report C
Slide 24: Appendix
Appendix • Business segment results FY 2017 – Income statement • Equities and alternative investments • Business segment results FY 2017 – Balance sheet • Investment portfolio positioning • Total equity and ROE FY 2017 • Sensitivities • P&C Reinsurance: 2018 renewals • Premiums by country • P&C unde
Slide 25: Business segment results FY 2017 – Income statement
Business segment results FY 2017 Income statement Corporate Total Total USD m Reinsurance P&C Re L&H Re Solutions Life Capital Group items Consolidation FY 2017 FY 2016 Revenues Gross premiums written 29 857 16 544 13 313 4 193 1 761 - -1 036 34 775 35 622 Net premiums written 27 857 16 031 11 826 3
Slide 26: Business segment results FY 2017 – Balance sheet
Business segment results FY 2017 Balance sheet Corporate End End 31 December 2017, USD m Reinsurance P&C Re L&H Re Solutions Life Capital Group Items Consolidation FY 2017 FY 2016 Assets Fixed income securities 66 831 34 189 32 642 8 356 26 528 71 - 101 786 93 276 Equity securities 2 838 1 893 945 4
Slide 27: Total equity and ROE FY 2017
Total equity and ROE FY 2017 1 Corporate Total USD m Reinsurance P&C Re L&H Re Solutions Life Capital Group Items FY 2017 2 Common shareholders' equity at 31 December 2016 19 500 12 688 6 812 2 218 7 272 5 544 34 532 Net income/loss attributable to common shareholders 679 -413 1 092 -741 161 232 331
Slide 28: P&C Reinsurance: 2018 renewals
P&C Reinsurance: 2018 renewals Portfolio weighting by line of business and region Gross premium volume, treaty portfolio Up for renewal January1 Estimated outcome January By line of business 16% 17% Casualty 46% 46% Nat cat 22% 18% Property 2 Specialty 2 16% 19% By region 21% 25% EMEA 55% 50% Americ
Slide 29: P&C underwriting performance
P&C underwriting performance Combined ratio Main drivers of change Net premiums Underwriting earned result P&C Reinsurance FY 2017 FY 2017 FY 2016 FY 2017 USD m USD m Property 86.6% 119.9% • 2017 reflects impact from large natural catastrophe claims, partially offset by 6 255 -1 244 favourable prior
Slide 30: L&H Reinsurance EBIT movements
L&H Reinsurance EBIT movements EBIT movements In USD m FY 2016 FY 2017 Life Health L&H Life Health L&H EBIT reported1 867 268 1 350 935 345 1 8154 Net operating margin, %1 9.9 6.6 10.4 9.9 8.8 13.1 Mortality/morbidity experience vs. expected2 -108 -58 -166 21 -8 13 Valuation/assumption changes3 150
Slide 31: Corporate Solutions combined ratio details
Corporate Solutions combined ratio details Combined ratio decomposition 133.4 %pts 7.2 %pts FY FY FY 2015 2016 2017 28.7 93.2 101.1 Reported combined ratio 93.2 101.1 133.4 0.8 1.5 1.0 10.3 5.4 4.0 • Large natural catastrophe impact -0.8 -1.5 -28.7 51.8 56.7 57.5 • Large man-made impact -10.3 -5.4 -
Slide 32: Return on investments (ROI)
Return on investments (ROI) Corporate Group Consoli- Total Total USD m P&C Re L&H Re Solutions Life Capital items dation FY 2017 FY 2016 Investment related net investment income 922 1 105 183 894 184 -156 3 132 3 099 Fixed income 703 1 044 166 850 2 - 2 765 2 797 Equities and alternative investments
Slide 33: Overall investment portfolio
Overall investment portfolio Other investments incl. policy Cash and cash equivalents loans 4% 7% End Mortgages and other Short-term investments FY 2017 loans 4% USD bn 3% Balance sheet values 168.7 Equities 5% Unit-linked investments -31.3 Government bonds With-profit business -5.7 41% Assets for o
Slide 34: Fixed income securities
Fixed income securities Government Credit • Increase in government bonds mainly due to USD m bonds bonds net purchases and fx impacts End FY 2016 48 374 44 902 • Credit bonds include corporate bonds (USD End 42.6bn) and securitised products (USD FY 2017 54 658 47 128 4.5bn) • Increase in credit bond
Slide 35: Equities and alternative investments
Equities and alternative investments Equity securities Exchange-traded funds by sector Non-Cyclical Consumer Goods End End 2% 2% 2% Financials USD m FY 2016 FY 2017 3% 4% Information Technology Equity securities 2 698 3 326 5% Cyclical Services 6% General Industrials Private equity 1 430 1 382 55% C
Slide 36: Investment portfolio positioning
Investment portfolio positioning • Decrease in cash and short-term investments allocation driven by net 1% 1% purchases of shorter-term fixed income securities, increasing income 7% 7% with low duration risk • Increase in credit allocation driven by fx impacts and positive impact 40% 42% from credit
Slide 37: 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 -1.7 -0.7 +1.7 Estimated impact on economic net worth (EVM) -2.2 -0.9 +2.3 Estimated impact on income/loss before income tax expense
Slide 38: Premiums by country
Premiums by country 2017 Gross premiums written and fees assessed against policyholders by country1 Total Total USD m Life & Health Non-Life FY 2017 FY 2016 United States 5 987 8 764 14 751 14 584 United Kingdom 2 386 1 003 3 389 3 898 Australia 1 388 758 2 146 1 988 China 343 1 189 1 532 2 409 Germ
Slide 39: Swiss Re is broadly diversified
Swiss Re is broadly diversified Swiss Re Group net premiums earned1 2017: USD 33.7bn USD 16.1bn USD 10.5bn USD 7.1bn Americas EMEA Asia 48% 31% 21% of which HGMs: ~3% ~3% ~11% ≈17% HGMs incl. PI2: ~5% ~3% ~15% ≈23% 1 Includes fee income from policyholders; does not reflect the exposure to HGMs throu
Slide 40: 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 24.3 23.5 20.6 22.2 25.4 28.9 31.3 30.2 33.2 33.7 10% 9% 11% 11% 12% 12% 13% 13% 12% 12% 36% 36% 35% 30% 27% 26% 26% 26% 27% 36% 11% 11% 12% 10% 10% 11% 15% 15% 13% 12% 21% 22% 24% 25% 28
Slide 41: 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 42: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 2018 15 March Publication of Annual Report 2017 4 April Investors’ Day Zurich 20 April 154th Annual General Meeting Zurich 4 May First Quarter 2018 Key Financial Data Conference call 3 August Half-Year 2018 Results Conference call 1 November Nine Mont