Swiss Re Ag · SIX:SREN
Swiss Re — Q1 2015 Earnings Presentation
29 slides from Swiss Re's earnings presentation, Apr 30, 2015
Slide 1: First quarter 2015 results
First quarter 2015 results Analyst and investor presentation Zurich, 30 April 2015
Slide 2: Business performance
Business performance First quarter 2015 results 2
Slide 3: All Business Units contributed to Swiss Re's strong Q1 2015 results
All Business Units contributed to Swiss Re's strong Q1 2015 results • Swiss Re reports first quarter net income of USD 1.4bn, supported by solid underwriting and strong investment results; ROE of 16.1% • P&C Reinsurance continues to deliver strong results with net income of USD 808m, reflecting beni
Slide 4: Key figures
Key figures Corporate Admin Group Total Total USD m, unless otherwise stated P&C Re L&H Re Solutions Re® items Q1 2015 Q1 2014 • Premiums earned and fee income 3 767 2 692 882 221 - 7 562 7 551 • Net income/loss 808 277 167 206 -18 1 440 1 226 • Return on investments 4.2% 3.4% 3.4% 5.2% -2.4% 3.9% 3
Slide 5: Underwriting and investment performance are both strong and stable
Underwriting and investment performance are both strong and stable 130% 5% 120% 4% 110% 114.1 101.1 98.2 98.3 97.3 100% 93.9 104.7 95.4 92.8 91.2 3% 104.0 88.7 90% 98.4 98.4 97.9 97.4 96.8 90.2 93.7 2% 80% 90.4 85.7 83.1 85.4 85.0 1% 70% 60% 0% 1 5-year avg US Treasury risk-free rates (RHS) Group co
Slide 6: P&C Reinsurance continues to deliver strong results
P&C Reinsurance continues to deliver strong results Net premiums earned Combined ratio Net income USD m, % % USD m, % -1.2% +5.2%pts -18.4% 79.2% 3 813 3 767 990 84.4% 808 ROE: 22.7% Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015 • At constant fx rates, premiums • Net impact from large nat cats in
Slide 7: L&H Reinsurance is on track to achieve its ROE target
L&H Reinsurance is on track to achieve its ROE target Premiums earned and fees Operating margin Net income USD m, % % USD m, % +0.7% -0.5%pts 10.1% 9.6% 2 692 277 ROE: 2 672 17.2% Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 64 Q1 2015 • Premium and fees are stable, with • Operating margin broadly stable
Slide 8: Corporate Solutions continues to deliver profitable growth
Corporate Solutions continues to deliver profitable growth Net premiums earned Combined ratio Net income USD m FY % USD m FY +6.3% -7.4%pts +108.8% 87.8% 882 167 ROE: 29.0% 830 95.2% 80 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015 • Pace of growth slowed due to the • No impact from large nat cat
Slide 9: Admin Re® delivers good performance
Admin Re® delivers good performance Gross cash generation Return on investments Net income USD m % USD m FY -74.3% +0.3%pts +329.2% 5.2% 202 4.9% 206 ROE: 12.7% Q1 2014 52 Q1 2015 Q1 2014 Q1 2015 Q1 2014 48 Q1 2015 • Q1 2015 GCG is in line with • Strong Q1 2015 ROI of 5.2% • Q1 2015 net income suppo
Slide 10: Group investment portfolio makes a strong contribution
Group investment portfolio makes a strong contribution Average invested assets Return on investments Total return USD bn, basis for ROI calculation % % -1.7% +0.2%pts +1.8%pts 9.6% 3.9% 114.9 113.0 3.7% 7.8% Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015 • Decrease in average invested asset • ROI o
Slide 11: Increase in common shareholders' equity due to net income and unrealised gains
Increase in common shareholders' equity due to net income and unrealised gains Gov bonds 0.9 Corp bonds 0.5 Sec products 0.0 Equities and USD m others 0.3 Tax -0.5 Total 1.2 36 578 1 196 - 886 1 440 34 828 Common shareholders' Net income Other 2 Net change in Common shareholders' equity attributable
Slide 12: Group capitalisation remains very strong under Swiss Solvency Test (SST)
Group capitalisation remains very strong under Swiss Solvency Test (SST) SST risk-bearing SST target capital SST ratio USD bn; % capital 70 300% 269% 245% 241% 60 250% 223% 208% 213% 50 200% 40 150% 30 100% 20 10 50% 40.5 15.0 38.5 18.5 40.7 19.1 48.7 19.8 52.2 21.6 52.6 23.6 0 0% SST 1/2010 1/2011
Slide 13: April renewals and financial targets
April renewals and financial targets First quarter 2015 results 13
Slide 14: Price quality of P&C Re portfolio remains attractive following April renewals
Price quality of P&C Re portfolio remains attractive following April renewals January 2015 treaty renewals1 -1% YTD 2015 renewals (January – April) USD 8.9bn USD 8.8bn Treaty portfolio volume Up for renewal Estimated 1 Jan 2015 outcome USD 10.3bn USD 10.3bn April 2015 treaty renewals +7% USD 1.4bn U
Slide 15: Significant potential for insurance industry to narrow the protection gap
Significant potential for insurance industry to narrow the protection gap USD bn 450 • Economic development, Uninsured losses Insured losses population growth and a 400 10-year moving average insured losses higher concentration of 10-year moving average total economic losses 350 assets in exposed ar
Slide 16: On track to meet our 2011-2015 Group financial targets
On track to meet our 2011-2015 Group financial targets ROE 700 bps above risk free EPS 10% average annual ENW per share growth plus average over 5 years (2011- growth rate, adjusted for dividends 10% avg. annual 2015) special dividends1 growth rate over 5 years in % in USD2 in USD 16.1 135.6 13.0 14
Slide 17: Appendix
Appendix • Business segment results Q1 2015 – Income statement • Business segment results Q1 2015 – Balance sheet • Total equity and ROE Q1 2015 • P&C Reinsurance – Underwriting performance • P&C Reinsurance: 2015 renewals - Portfolio weighting by line of business and region • Corporate Solutions –
Slide 18: Business segment results Q1 2015 – Income statement
Business segment results Q1 2015 Income statement Re- Corporate Admin Group Consoli- Total Total USD m insurance P&C Re L&H Re Solutions Re® items dation Q1 2015 Q1 2014 Revenues Premiums earned 6 444 3 767 2 677 882 87 - - 7 413 7 428 Fee income from policyholders 15 - 15 - 134 - - 149 123 Net inve
Slide 19: Business segment results Q1 2015 – Balance sheet
Business segment results Q1 2015 Balance sheet Re- Corporate Admin Group Consoli- End End 31 March 2015, USD m insurance P&C Re L&H Re Solutions Re® items dation Q1 2015 FY 2014 Assets Fixed income securities 63 211 33 399 29 812 5 915 20 164 26 - 89 316 86 669 Equity securities 3 338 2 371 967 946
Slide 20: Total equity and ROE Q1 2015
Total equity and ROE Q1 2015 Re- Corporate Admin Group Total1 USD m insurance P&C Re L&H Re Solutions Re® items Q1 2015 Common shareholders' equity2 at 31 December 2014 20 025 13 859 6 166 2 334 6 388 6 085 34 828 Net income attributable to common shareholders 1 085 808 277 167 206 -18 1 440 Dividen
Slide 21: P&C Reinsurance – Underwriting performance
P&C Reinsurance Underwriting performance Combined ratios in %, premiums and underwriting result in USD m Net Under- Q1 Q1 premiums writing 2014 2015 Main drivers of change earned result Property 56.5% 73.1% • Increase reflects price reductions and less 1 519 408 favourable reserve developments Casua
Slide 22: P&C Reinsurance: 2015 renewals
P&C Reinsurance: 2015 renewals Portfolio weighting by line of business and region Gross premium volume, treaty portfolio Up for renewal YTD April Estimated outcome YTD April By line of business 14% 16% Casualty 43% 43% Nat Cat 21% 21% Property 1 22% 20% Specialty 1 By region 33% 45% 33% 43% EMEA Ame
Slide 23: Corporate Solutions – Underwriting performance
Corporate Solutions Underwriting performance Combined ratios in %, premiums and underwriting result in USD m Net Under- Q1 Q1 premiums writing 2014 2015 Main drivers of change earned result Property 101.5% 80.1% • No major natural catastrophe loss in either 322 64 period • 2014 was impacted by highe
Slide 24: Return on investments (ROI)
Return on investments (ROI) Corporate Admin Group Consoli- Total Total USD m P&C Re L&H Re Solutions Re® items dation Q1 2015 Q1 2014 Investment related net investment income 271 271 33 186 -36 3 728 835 Fixed income 178 261 31 178 - - 648 686 Equities and alternatives (incl. RE, PE, HF) 110 7 4 - -
Slide 25: Overall investment portfolio
Overall investment portfolio Mortgages Cash and and other Other incl. cash loans policy loans 5% equivalents End Equities 2% 6% Short-term USD bn Q1 2015 7% investments Securitised 9% Balance sheet values 153.3 products Unit-linked investments -22.5 5% With-profit business -3.2 Government Assets for
Slide 26: Fixed income securities
Fixed income securities Government Credit • Increase in government bonds USD m bonds bonds driven by net purchases (mainly US End Treasury securities), reducing the FY 2014 48 271 38 398 overall cash allocation End Q1 2015 50 812 38 504 • Credit bonds include corporate bonds (USD 32.7bn) and securit
Slide 27: Equities and alternative investments
Equities and alternative investments Listed Equities Exchange-traded funds by sector Non-Cyclical Consumer Goods Equities Information Technology End End 3% 3% 1% 3% Financials USD m FY 2014 Q1 2015 5% 31% Cyclical Services Listed Equities1 3 118 4 202 7% General Industrials Private Equity1 1 709 1 6
Slide 28: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 2015 30 July Second Quarter 2015 Results Conference call 29 October Third Quarter 2015 Results Conference call 8 December Investors' Day Zurich 2016 23 February Annual Results 2015 Conference call Investor Relations contacts Hotline E-mail +41 43 285
Slide 29: 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 an