Swiss Re AG · SIX:SREN
Swiss Re — Investor Day (November 2019)
101 slides from Swiss Re's investor day presentation, Nov 25, 2019
Slide 1: Investors' Day
Investors’ Day London, 25 November 2019
Slide 2: Agenda – Investors' Day 2019
Agenda – Investors’ Day 2019 Time Content Management 10:30 – 11:00 Registration 11:00 – 11:20 Group strategy Christian Mumenthaler 11:20 – 11:40 Financial strength and capital management John Dacey 11:40 – 11:50 Asset management Guido Fürer 11:50 – 12:30 Q&A session 12:30 – 13:30 Lunch 13:30 – 13:50
Slide 3: Group strategy
Group strategy Christian Mumenthaler, Group Chief Executive Officer
Slide 4: Swiss Re's success is built on three key differentiation drivers
Swiss Re’s success is built on three key differentiation drivers Reinsurance Corporate Solutions Life Capital Foundation of our strength with Returning to profitability and Transitioning to a digital increasing earnings power focused on competitive advantages B2B2C player Client Risk Capital Access
Slide 5: Our client access capabilities are unique
Client Access Our client access capabilities are unique We maintain strong direct relationships with our …while also partnering with non-insurance players reinsurance clients… for innovative B2C insurance propositions Illustrative – Global client Illustrative – Partnership portfolio Swiss Re employe
Slide 6: We operate a truly global and diversified Group
Client Access We operate a truly global and diversified Group Premiums Americas EMEA Asia «We make the EVM1 USD 15bn USD 13bn USD 16bn world more US GAAP2 USD 16bn USD 11bn USD 7bn resilient» >150 countries >100 000 P&C clients supported >175 million Premiums per country1 family members supported US
Slide 7: We monetise our R&D capabilities, cementing Swiss Re as the leading knowledge company
Risk Knowledge We monetise our R&D capabilities, cementing Swiss Re as the leading knowledge company R&D value driver framework Strategic focus areas Project examples Market intelligence Insurance markets and cycle analysis Business steering Macroeconomic R&D Insurance beta Advance Nat Cat risk view
Slide 8: Continued progress on our tech transformation roadmap
Risk Knowledge Continued progress on our tech transformation roadmap Clear and pragmatic business objectives USD ~300m total investments p.a. in key tech projects 1 OUR CLIENTS OURSELVES 2 Selected examples: Increase our clients’ Apply tech to improve iptiQ competitiveness our own value chain state-
Slide 9: Strengthening our connection to clients by commercialising our digital platforms
Risk Knowledge Strengthening our connection to clients by commercialising our digital platforms Digital platforms have become a significant business facilitator for Swiss Re USD bn > USD 2.5bn > 800 3.0 2.5 attributable EVM premiums1 clients onboarded 2.0 iptiQ 1.5 Corporate Solutions P&C Re Solutio
Slide 10: Our capital strength remains industry-leading
Capital Strength Our capital strength remains industry-leading Comparison of Group SST / Solvency II ratio1 >260% • As a major risk absorber, Swiss Re’s first capital 241% management priority is to ensure superior capitalisation 234% at all times 202% • The Group benefits from peer-leading diversifi
Slide 11: Reinsurance has built up industry-leading competitive advantages
Reinsurance Corporate Solutions Life Capital Reinsurance has built up industry-leading competitive advantages Title to go here two lines maximum Global scale 17% 11% market share1 for L&H Re market share1 for P&C Re L&H Re with P&C Re with Direct client access >90% >50% premiums from non-intermediat
Slide 12: Reinsurance is the key driver of Swiss Re's earnings power
Reinsurance Corporate Solutions Life Capital Reinsurance is the key driver of Swiss Re’s earnings power, further benefitting from P&C Re’s new business growth in 2019 L&H Re P&C Re EVM profit1 – Costed new business, USD bn EVM profit1 – Costed new business, USD bn 1.2 1.2 1.2 Balanced 1.0 earnings p
Slide 13: Corporate Solutions is focused on returning to underwriting profitability
Reinsurance Corporate Solutions Life Capital Corporate Solutions is focused on returning to underwriting profitability and on differentiated growth Good progress in implementing management actions Strategic priorities • Targeted portfolio pruning While implementing management actions, Corporate Solu
Slide 14: Mid-term intention to deconsolidate ReAssure remains unchanged
Reinsurance Corporate Solutions Life Capital Mid-term intention to deconsolidate ReAssure remains unchanged Current shareholding • Swiss Re continues to support ReAssure’s growth strategy and to benefit from cash generation capacity MS&AD 25% • ReAssure announced the acquisition of Quilter’s UK Heri
Slide 15: iptiQ is our state-of-the-art digital white labelling B2B2C insurance platform
Reinsurance Corporate Solutions Life Capital iptiQ is our state-of-the-art digital white labelling B2B2C insurance platform Title to go here two lines maximum 28 partners Geographic reach Insurers Insurance intermediaries Current footprint Banks Ecosystems Expansion opportunity Key capabilities Prod
Slide 16: iptiQ businesses are growing dynamically, with significant expansion opportunities
Reinsurance Corporate Solutions Life Capital iptiQ businesses are growing dynamically, with significant expansion opportunities Gross premiums written (GPW)1 Annualised new business premium (APN)1 USD m USD m 225 ~USD 155m APN in biometric L&H risks vs. USD 200-300m for CAGR +92% ~155 UK’s largest p
Slide 17: Swiss Re maintains leadership in sustainability
Swiss Re maintains leadership in sustainability External recognition Responsible investing ~100% assets considering ESG criteria Embed sustainability in July 2019 all our business activities Underwriting ~3400 wind and solar farms insured Lead Quantify sustainability- sustainability linked solutions
Slide 18: Financial strength and capital management
Financial strength and capital management John Dacey, Group Chief Financial Officer
Slide 19: Our resilient balance sheet allows us to absorb shocks and benefit from long-term opportunities
Our resilient balance sheet allows us to absorb shocks and benefit from long-term opportunities Challenging macro backdrop Low and negative interest rates are here to stay Slow and fragile global economic growth, with downside risks prevailing Our Trade war #1 risk for the outlook balance sheet is r
Slide 20: Our Group capital position remains very strong
Our Group capital position remains very strong with significant capital deployment supporting business growth in 2019 Group SST ratio development USD bn, % Illustrative 80.0 269% 261% 262% 70.0 251% 241% • SST available capital increase mainly Group SST target 60.0 capitalisation1 due to strong econ
Slide 21: Our economic earnings strength is based on sustainable generation of new business profits
Our economic earnings strength is based on sustainable generation of new business profits and increasing in-force earnings… EVM profit – new business USD 1.1bn Release of current year USD 1.6bn Release of current year USD 1.1bn (above capital costs) Avg. 2012-191 capital costs – Underwriting Avg. 20
Slide 22: …which provides the basis for our peer-leading capital repatriation
…which provides the basis for our peer-leading capital repatriation External total capital repatriation Total yield 20192 USD bn, in year paid 3.1 2.7 2.6 2.9 2.7 Swiss Re 5.3% 3.2% 8.4% 1.5 1.3 Special dividend and 1.1 1.1 1.01 share buy-back Peer 1 3.6% 2.7% 6.3% 1.5 1.6 1.6 1.6 1.7 Ordinary divid
Slide 23: Swiss Re's dynamic capital structure provides significant financial flexibility
Swiss Re’s dynamic capital structure provides significant financial flexibility, supported by the Group’s strong funding platforms Group available capital Debt funding Outlook USD bn 57.4 Senior leverage Focus on efficiency 6.7 Additional USD 2.7bn 48.8 pre-funded subordinated 7.0 3.2 debt available
Slide 24: Establishing Alternative Capital Partners (ACP) enhances our capital structure
Establishing Alternative Capital Partners (ACP) enhances our capital structure to execute our Nat Cat strategy Swiss Re is the natural home for Nat Cat with a long track record ACP established within Group Finance to consider in the alternative capital space all sources of capital holistically Spons
Slide 25: ACP follows a differentiated partnership approach
ACP follows a differentiated partnership approach Vision Approach Objectives It is our ambition to be the best We have a differentiated Enable growth of Swiss Re’s client franchise integrated capital franchise approach • Manage peak risk tolerance • Grow share of wallet with clients • Being a releva
Slide 26: Our Group targets and capital management priorities remain unchanged
Our Group targets and capital management priorities remain unchanged Group return on equity Priority I Priority II 13.7% 10.5% 10.6% Ensure superior capitalisation Grow the regular dividend 6.0% Rf + at all times and maximise with long-term earnings, and 9.6% 9.2% 9.4% 9.4% 9.6% 9.2% 700 financial f
Slide 27: Asset management
Asset management Guido Fürer, Group Chief Investment Officer
Slide 28: Asset Management is a key contributor to the Group's value proposition
Asset Management is a key contributor to the Group's value proposition Attractive returns Industry-leading ESG approach Long-term, sustainable returns Systematic integration of ESG considerations Average yearly pre-tax contribution of USD 4.0bn ~100% to Swiss Re Group’s US GAAP results from 2014-201
Slide 29: Stable current income and performance above peer average
Stable current income and performance above peer average Investment performance In % 4.3 3.9 • Well-balanced investment portfolio 3.7 3.5 3.4 1.3 0.8 1.3 2.8 • 3.6% average ROI since 2014 vs. peer 0.9 0.8 3.3 3.0 2.9 median at 3.3%1 2.9 2.9 2.9 • Stable running yield due to concentration in 2.9 2.9
Slide 30: Investment portfolio shifts support longer term stability of results
Investment portfolio shifts support longer term stability of results Shift to higher return generating strategies Defensive credit positioning with focus on quality, yield and diversification Total SAA Total SAA change Credit bonds Private Debt Real Estate USD 131.3bn since End FY 2016 USD 48.1bn US
Slide 31: Better risk-adjusted returns supported by industry-leading ESG investment approach
Better risk-adjusted returns supported by industry-leading ESG investment approach Risk-adjusted return of credit ESG Our continued Responsible Investing leadership benchmarks exceeds traditional returns1 contributes to our vision of making the world more resilient US Corp Int (Traditional) 0.68 US
Slide 32: Reinsurance
Reinsurance Moses Ojeisekhoba, Chief Executive Officer Reinsurance
Slide 33: Differentiation is at the heart of Swiss Re's Reinsurance franchise
Differentiation is at the heart of Swiss Re’s Reinsurance franchise Our client relationships have been We dedicate resources to Capacity is important to our clients built over time, with strong C-suite generating actionable insights and helps us gain access to access which we use and share with clie
Slide 34: Our financial performance reflects our market-leading capabilities
Our financial performance reflects our market-leading capabilities Reinsurance delivers a market-leading1 combination of shareholder returns and capital repatriation Avg. ROE, 2015-20192 16% 14% In recent years, both Reinsurance segments have performed in line with 12% their ROE targets 10% • P&C Re
Slide 35: However, the market is changing and we are taking action
However, the market is changing and we are taking action Reinsurance industry development1 and interest rate evolution Historical outperformance was driven by 7% • Active cycle management and capital deployment 400 6% Reinsurance capital in USD bn Industry change due to 5% 300 Interest rate in % • L
Slide 36: We have developed a clear strategy to succeed in this environment
We have developed a clear strategy to succeed in this environment Core Transactions Solutions Traditional reinsurance Tailored and structured Additional value-adding offerings reinsurance services Competitive Crowded and increasingly Specialised with a few Selected major competitors dynamics commodi
Slide 37: We aim to grow and balance our portfolios on multiple dimensions
We aim to grow and balance our portfolios on multiple dimensions 2014 2018 mid-term Illustrative Core Core Core Transactions Transactions Transactions Solutions Solutions Solutions Americas EMEA Asia Americas EMEA Asia Americas EMEA Asia 40% 40% 20% 35% 30% 35% 35% 30% 35% Property Casualty Specialt
Slide 38: Robust portfolio steering guides our growth strategy
Core Robust portfolio steering guides our growth strategy Portfolios are actively steered to ensure disciplined growth… …based on pricing outlook and market trends Enhanced profitability Pricing x Exposure = Premium 1 Property Cat 2 Property Non-Cat 3 Liability 5 4 Motor 6 7 8 4 5 Specialty 3 6 Mort
Slide 39: Scaling our P&C Re franchise improves the combined ratio
Core Transactions Scaling our P&C Re franchise improves the combined ratio Improved combined ratio1 Further improvements expected from selective growth and resulting scale benefits 100% 99% 98% Focus on reducing operating expenses 0.3%pt improvement 10% from 10% Nat Cat premium growth2 Expense ratio
Slide 40: L&H Re continues to gain scale and is now a globally diversified business
Core Transactions L&H Re continues to gain scale and is now a globally diversified business Asia as the key driver of new business growth L&H Re has nearly doubled its annual economic earnings EVM profit1 – Costed new business, USD bn EVM profit1 – Costed new business, USD bn 1.2 USD 0.7bn USD 1.2bn
Slide 41: Transactions are an important contributor to Swiss Re's offering
Transactions Transactions are an important contributor to Swiss Re’s offering The market has grown, driven by a range of needs Transactions have contributed to diversification of earnings • Changing regulatory and accounting requirements EVM profit1 – Costed new business, USD bn 0.8 • Stakeholders d
Slide 42: Solutions continue to grow and are embedded in our clients' business
Solutions Solutions continue to grow and are embedded in our clients’ business We help clients to improve their original business A powerful partnership Profitability Analyse portfolio mix, risk drivers and price Powerful alignment of interests adequacy Creating long-term strategic partnerships and
Slide 43: Solutions examples: tangible benefits for clients and Swiss Re
Solutions Solutions examples: We deliver tangible benefits both for our clients and for Swiss Re P&C Data Analytics L&H Customer Retention Management Client case study – Loss driver analysis Client case study – Improving customer satisfaction -6%pts -55% loss ratio lapse rate USD 9m USD 2m USD 36m U
Slide 44: Swiss Re's successful Reinsurance strategy is built on differentiation
Swiss Re’s successful Reinsurance strategy is built on differentiation Our financial targets remain unchanged Our Reinsurance franchise has a strong track record of delivering results 10-15% We are adapting to a changing marketplace – we maintain our ROE over-the-cycle edge through Core, Transaction
Slide 45: Reinsurance portfolio steering
Reinsurance portfolio steering Edi Schmid, Chairman Swiss Re Institute & Group Chief Underwriting Officer
Slide 46: We steer our portfolio by managing growth, profitability and risk exposure
We steer our portfolio by managing growth, profitability and risk exposure Enhanced profitability Update on Update on Nat Cat – Reinsurance US Casualty – Reinsurance Sustainable growth Exposure management Investors' Day | London, 25 November 2019 46
Slide 47: Nat Cat is a large and growing risk pool
Nat Cat is a large and growing risk pool, with additional opportunities linked to the protection gap Nat Cat is a USD 30bn reinsurance …growing faster than GDP to an Additionally, there is a USD 222bn market… expected USD 40bn by 2023 protection gap Nominal growth rates (2000-2018) ANZ 6.0-6.5% 5.5%
Slide 48: Swiss Re is a key player in Nat Cat
Swiss Re is a key player in Nat Cat, reflecting our vision to make the world more resilient Our Nat Cat reinsurance market share Our annual expected loss by geographic region % of tail risk 14% 12% 10% 8% 17% 40% EMEA 6% N. America 22% 4% Asia 2% 0% 2012 2013 2014 2015 2016 2017 2018 2019 TC North A
Slide 49: We have a track record of solid costing accuracy…
We have a track record of solid costing accuracy… Over the cycle, our Nat Cat costing is accurate: Actual losses are closely in line with our expectations Annual Nat Cat claims and expected losses vs. premiums, USD bn Cumulative Nat Cat claims and expected losses vs. premiums, USD bn 5 45 40 >16bn 4
Slide 50: …supported by substantial proprietary R&D
…supported by substantial proprietary R&D Impactful and evolving R&D efforts… …leveraging consistent global infrastructure …for differentiating outcomes Swiss Re’s global multi-peril risk model Learning from risk taking experience Underwriting decisions leverage our Close connection to underwriting
Slide 51: Nat Cat portfolio delivers attractive returns, benefitting from diversification
Swiss Re’s Nat Cat portfolio delivers attractive returns, benefitting from substantial diversification Profitability of Nat Cat book is well above our hurdle rate… …supported by our global and diversified business model Nat Cat return on economic capital, % (new business, as costed)1 Contribution to
Slide 52: We expect an uplift in earnings from profitable growth of our Nat Cat portfolio
We expect an uplift in earnings generated by profitable growth of our Nat Cat portfolio Budget expected to increase less than change in capital deployed Nat Cat budget expected to increase for 2020 • Year-on-year increase in Nat Cat capital deployed was 36% at July renewals USD bn 3.0 • Our growth i
Slide 53: ACP allows Swiss Re to grow our Nat Cat portfolio in a risk-controlled manner
Alternative Capital Partners (ACP) allows Swiss Re to grow our Nat Cat portfolio in a risk-controlled manner Increased Nat Cat risk exposure supported by more active We manage our net risk exposure by ceding excess use of hedging tools1 risks to third-party capital investors USD bn 15 20% 13% 10 • A
Slide 54: US Casualty market trends have deteriorated through a soft market
US Casualty market trends have deteriorated through a soft market US Commercial P&C rates stagnated for several years… …while the average size of large tort verdicts has been rising… % premium change, new and renewed policies, by size of corporate accounts1 Top 50 US tort verdicts: median verdict va
Slide 55: Targeted actions to improve profitability and manage risk in our Casualty portfolio
We have taken targeted actions to improve profitability and manage risk in our Casualty portfolio Casualty actions are ongoing to continually manage our book Economic combined ratio – Casualty Reinsurance1 Specific strategies for each sub-portfolio defined based on 1. Top-down forward-looking view o
Slide 56: Our Casualty Reinsurance portfolio is well diversified
Our Casualty Reinsurance portfolio is well diversified, giving us scope to absorb volatility… Casualty with broad mix accounting for 52% of P&C Re premiums Exposure to US Large Corporate Risk (LCR) is well contained Casualty Reinsurance, 20191 EVM premiums • US Casualty portfolio covers many market
Slide 57: … and making US reserving risks manageable
… and making US reserving risks manageable Casualty reserves make up USD 28bn of the USD 40bn P&C Re total Proactive measures on the most recent underwriting years Casualty Reinsurance reserves, 2018 split • Market concern is around US Casualty reserves, but not all areas Casualty Reinsurance US Cas
Slide 58: Our Casualty Reinsurance portfolio is prudently reserved
Overall, our Casualty Reinsurance portfolio is prudently reserved and we expect this to remain the case We consistently reserve more cautiously than Our Casualty reserves remain between the 60th and 80th US P&C clients percentile of the best estimate range Swiss Re US Liability business1 vs. US P&C
Slide 59: Significant market hardening expected; benefit from primary insurers' actions
Looking ahead, we see significant market hardening and expect to benefit from actions taken by primary insurers • Commercial Motor shows strong (albeit slowing) rate increases Acceleration of rate increases across US primary Casualty lines reflecting recent claims inflation; terms and conditions (T&
Slide 60: Our robust portfolio management framework fosters steering of capital allocation
Our robust portfolio management framework fosters the steering of our capital allocation Enhanced profitability Nat Cat – Reinsurance US Casualty – Reinsurance • Large and growing risk pool • Close monitoring of loss trend developments • Attractive risk-return profile • In-depth review of LCR exposu
Slide 61: Corporate Solutions
Corporate Solutions Andreas Berger, Chief Executive Officer Corporate Solutions
Slide 62: Corporate Solutions remains key to Swiss Re's differentiation strategy
Corporate Solutions remains key to Swiss Re’s differentiation strategy Implement De-commoditise our core Grow with Expand through tech- management actions business differentiating assets driven solutions Client Risk Capital Access Knowledge Strength Investors' Day | London, 25 November 2019 62
Slide 63: Focused value proposition in a large pool of commercial insurance risks
Focused value proposition in a large pool of commercial insurance risks Commercial Corporate Solutions’ insurance market addressable market Our market presence Our proposition Segmentation Gross premiums written, 20191 Excess Layers: Bringing international programme Top 5 – 10 capabilities where few
Slide 64: We are building on Corporate Solutions' strategic priorities
We are building on Corporate Solutions’ strategic priorities Expand through De-commoditise Grow with our Implement management actions tech-driven our core business differentiating assets solutions Pruning, expense savings, rate Leverage risk knowledge, Address industry Capture value and increases an
Slide 65: We are rebalancing towards a more diversified global portfolio
We are rebalancing towards a more diversified global portfolio Portfolio split by region and sub-line Portfolio development year-on-year % of gross premiums written Gross premiums written, USD bn ~4.4 USD 3.2bn USD 3.6bn 9% 11% Asia 3.6 22% 27% EMEA 3.2 0.3 10% Latin America 9% -0.2 0.3 North Americ
Slide 66: Good progress with the implementation of our management actions
Good progress with the implementation of our management actions Expected combined ratio development 110% ~5%pts ~6%pts ~1%pt 98% ~2%pts Normalised 2018 Portfolio pruning Rate increases Net expense savings Adjusted reinsurance 2021 target combined ratio structure combined ratio1 ~25% of pruning Broad
Slide 67: Pricing momentum for Corporate Solutions remains strong
Pricing momentum for Corporate Solutions remains strong Commercial insurance market prices are increasing since 2018 Corporate Solutions is seeing even stronger pricing momentum1 Risk-adjusted price quality change Premium volume 15% 14% 13% 13% 12% 12% 11% 10% 7% 5% Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 2015 2
Slide 68: De-commoditise our core business
De-commoditise our core business Line of business Superior insights Property & • Proprietary Nat Cat model offers differentiated view of risk to market; market-leading Energy innovative capabilities (e.g. parametric solutions) • 20+ years close relationships with large accountants and lawyers create
Slide 69: Capturing value from differentiating Corporate Solutions' assets
Capturing value from differentiating Corporate Solutions’ assets International Programme Innovative Risk Solutions High-growth market Weather / Environmental Lead (IRS) joint venture plays and commodity markets Leverage market-ready, state-of- Highly structured risk solution Enter in selected distri
Slide 70: Pursue opportunities to develop innovative tech-driven solutions
Pursue opportunities to develop innovative tech-driven solutions Corporate Solutions will pursue strategic Strategic priorities tech initiatives for the future • Use of technology to drive clear Addressing customer differentiation in the market and pain points and industry e.g. IPA1 platform, genera
Slide 71: Forming a focused, profitable and resilient commercial lines business
Forming a focused, profitable and resilient commercial lines business Clear financial targets Establish stable foundation and restore underwriting profitability of Combined ratio target1 our book 98% Reduce earnings volatility and improve resilience vis-à-vis future in 2021 and pricing cycles furthe
Slide 72: Life Capital
Life Capital Thierry Léger, Chief Executive Officer Life Capital
Slide 73: Life Capital's three businesses continue to execute on their strategies
Life Capital’s three businesses continue to execute on their strategies UK life & pension closed book Group life, disability and income White-labelled individual protection consolidator protection solutions provider solutions provider Client Risk Capital Access Knowledge Strength Investors' Day | Lo
Slide 74: Swiss Re remains committed to supporting ReAssure's growth
Swiss Re remains committed to supporting ReAssure’s growth Zurich # of policies Annuities Quilter acquired Windsor 0.2m 0.2m Life GE Barclays Zurich 0.8m Life Life Alico HSBC L&G Life 0.4m Aviva 0.8m UK Life UK Life Guardian Mature Savings Virgin Money 0.2m Life Heritage 0.3m 0.4m 0.9m 1.1m <0.1m 2.
Slide 75: Solid ReAssure surplus generation and strong capital position
Solid ReAssure surplus generation and strong capital position Attractive Surplus Generation target H1 2019 customer satisfaction H1 2019 Solvency II ratio GBP 2.1bn FY 19-23E 88.6% 148%1 • Life Capital Gross Cash Generation target • Leading ratings amongst consolidators • Strong Solvency II balance
Slide 76: elipsLife continues to provide steady growth in group L&H
elipsLife continues to provide steady growth in group L&H through service and cost leadership Market focus Gross premiums written USD m • Group Life & Health 1 115 978 1 002 • Biometric risks 703 529 651 • Access to attractive risk pool Business model 327 412 473 • Profitable business for several ye
Slide 77: iptiQ applies cutting-edge technology to deliver insurance through partners
iptiQ applies cutting-edge technology to deliver insurance through partners B2B2C model… …with strong distribution partnerships Selected partners We offer • Seamless integration with our partners (60-day onboarding) • White labelled end-to-end insurance platform Ecosystems Insurers B2C • Risk select
Slide 78: iptiQ continues to enhance its consumer platform with data-driven insights
iptiQ continues to enhance its consumer platform with data-driven insights Efficient access through partners… …with simple products at fair value… …and continuous innovation # distribution partners L&H Voice-enabled, replicating 28 Term Life Whole Life Health add-ons human interaction Critical Estim
Slide 79: iptiQ generates efficient growth from invested capital
iptiQ generates efficient growth from invested capital Gross premiums written (GPW) relative to capital invested since inception1 GPW Capital invested Ratio of GPW to capital invested 0.5x 0.1x 0.4x 0.2x 0.7x 0.2x 475 225 InsurTech 1 InsurTech 2 InsurTech 3 InsurTech 4 InsurTech 5 • Solid premiums t
Slide 80: We incubate and operate dynamically growing start-up businesses…
We incubate and operate dynamically growing start-up businesses… Financial returns profile US GAAP and EVM returns profile – experience-based / illustrative Build & Scale-up & Steady state incubate break-even at target ROE • High upfront investments in build and growth • Businesses need scale to ach
Slide 81: …which increase Swiss Re's economic value
…which increase Swiss Re’s economic value Estimating the current value of iptiQ, as applied to… I …high growth insurance companies based on equity and value of new business1 ~USD 600m 20192 ENW ~1.0x ENW multiplier + ~USD 50m Normalised 20191 EVM new business profit ~10-15x VNB multiplier 3 ~USD
Slide 82: Transition from closed book consolidator to dynamic primary B2B2C business
Transition from closed book consolidator to dynamic primary B2B2C business continues, with significant value in the open books Key objectives Life Capital expands the Swiss Re Group’s access to attractive risk pools GBP 2.1bn ReAssure Surplus Generation Swiss Re remains committed to supporting ReAss
Slide 83: Wrap-up
Wrap-up Christian Mumenthaler, Group Chief Executive Officer 83
Slide 84: Swiss Re's success is built on three key differentiation drivers
Swiss Re’s success is built on three key differentiation drivers Reinsurance Corporate Solutions Life Capital Foundation of our strength with Returning to profitability and Transitioning to a digital increasing earnings power focused on competitive advantages B2B2C player Client Risk Capital Access
Slide 85: Appendix
Appendix 85
Slide 86: Group SST capital generation is supported by strong economic earnings
Group SST capital generation is supported by strong economic earnings 0.7 0.7 43.1 2.6 -0.4 -1.0 40.6 -0.2 SST available capital (USD bn)1 SST 1/2019 Economic Fx and interest Capital Other (incl. Change in Capital SST 7/2019 earnings rate impact2 deployment valuation supplementary repatriation4 (Con
Slide 87: Group deployed significant capital during H1 2019
Swiss Re Group deployed significant capital during H1 2019 with balanced growth in exposures Group SST economic target capital USD bn • Increase in P&C risk driven by strong renewals above what was Property & Casualty 11.3 +0.8 already reflected in SST 1/2019 • Overall L&H risk increase mainly drive
Slide 88: Our capital strength is resilient to market moves and insurance events
Our capital strength is resilient to market moves and insurance events Financial market sensitivities Insurance stresses Resulting estimated Group SST ratio 7/2019 Resulting estimated Group SST ratio 7/20191 Equity markets (-25%) 240% 1 in 200-year Atlantic hurricane 202% (USD 6.5bn2) Equity markets
Slide 89: Swiss Re has a long tradition in cat bonds and sidecar platforms
Swiss Re has a long tradition in cat bonds and sidecar platforms Swiss Re has been active in the Cat bond market for a long time… … with a long history of sharing Nat Cat risks with our partners Leading underwriters1 in the cat bond market since 1997 Size of Swiss Re sidecar platform (in terms of no
Slide 90: Our differentiation in Reinsurance is recognised by our clients
Our differentiation in Reinsurance is recognised by our clients Approximately 50% of our EVM profit is from Leading provider of products and service propositions differentiated business #1 #1 #2 42% 49% 54% 50% 49% for P&C for P&C for L&H Insurers Brokers Clients Reinsurance’s Business Capability In
Slide 91: Growing Nat Cat risk exposure in 2019 achieved at improved economics
Growing Nat Cat risk exposure in 2019 has been achieved at improved economics 99.5% VaR in USD bn, net of retrocession Change in technical combined ratio 07/2018 07/2019 6.3 All Nat Cat +27% 8.0 Net Gross 4.6 Atlantic hurricane +41% 6.5 3.0 Californian earthquake +39% 4.2 3.3 Japanese earthquake +10
Slide 92: Swiss Re is continually adapting to a dynamic Nat Cat risk landscape
Swiss Re is continually adapting to a dynamic Nat Cat risk landscape We observe increased volatility from Nat Cat perils We explicitly factor the main risk trends into our modelling in USD bn, at 2019 prices 160 140 Key macro risk trends Portfolio Explicit 120 relevance modelling 100 80 Urban develo
Slide 93: Refining US Liability risk appetite to reflect social trends
Continuously refining Swiss Re’s US Liability risk appetite to reflect social trends Market challenge Potential market impact Swiss Re mitigating actions • Maintaining a diversified portfolio across sub-lines of business and risk classes Large jury awards and • Progressively reducing exposure to Lar
Slide 94: We expect improving trends across our Casualty Reinsurance portfolio
We expect improving trends across our Casualty Reinsurance portfolio Illustrative Expected price change Expected trends North America Expected loss ratio Actual loss ratio (Risk adjusted) • Liability: Primary rate rises expected • Motor: Primary rate rises expected • Loss trends: Frequency expected
Slide 95: High volatility of loss ratios for Corporate Solutions vs. Reinsurance
High volatility of loss ratios for Corporate Solutions vs. Reinsurance mainly driven by impact of large individual claims Liability Reinsurance Liability Corporate Solutions IBNR IBNR • Large diversified portfolio with smaller limits • Portfolio with higher limits and more volatility • Trends impact
Slide 96: Update on Corporate Solutions transformation
Update on Corporate Solutions transformation Governance • New leadership structure established to ensure 360-degree view on strategic topics and consistent execution • Ensure clear accountability across all regions and functions • Clear priorities focusing on management actions to return to underwri
Slide 97: ReAssure asset portfolio break-down
ReAssure asset portfolio break-down Based on ReAssure methodology for portfolio decomposition and on IFRS reporting Shareholder and Policyholder Assets GBP 43.9bn GBP 73.7bn Shareholder Assets by type Shareholder Assets by rating End 9M 2019 End 9M 2019 25.2% Private debt Cash equivalents 5% 3%1% 4%
Slide 98: Corporate calendar and contacts
Corporate calendar and contacts Corporate calendar 2020 20 February Annual Results 2019 Conference call 19 March Publication of Annual Report 2019 17 April 156th Annual General Meeting Zurich Investor Relations contacts Hotline E-mail +41 43 285 4444 Investor_Relations@swissre.com Philippe Brahin Da
Slide 99: Investors' Day | London, 25 November 2019
Investors' Day | London, 25 November 2019 99
Slide 100: 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 101: Legal notice
Legal notice ©2019 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