Swiss Re Ag · SIX:SREN
Swiss Re — Vontobel Summer Conference 2015
27 slides from Swiss Re's conference presentation, May 20, 2015
Slide 1: Vontobel Summer Conference
Vontobel Summer Conference Edouard Schmid, Head Property & Specialty Reinsurance Interlaken, 20 May 2015
Slide 2: Today's agenda
Today's agenda Swiss Re performance P&C re/insurance pricing pressure Protection gaps and growth opportunities Conclusion and Q&A Vontobel Summer Conference | 20 May 2015 2
Slide 3: Swiss Re at a glance
Swiss Re at a glance Swiss Re is a leading and highly diversified global reinsurer, founded in Zurich (Switzerland) in 1863 The Group offers traditional reinsurance products and related services for property and casualty, as well as for life and health businesses The Group also offers commercial ins
Slide 4: Leadership through geographic and product diversification
Leadership through geographic and product diversification Net premiums earned1 2014 (USD 31.3bn) by region (in USD bn) … and by business segment: 12.2 11.3 7.8 Admin Re® Corporate 3% Solutions 11% P&C Re 50% Americas Europe Asia (incl. Middle East /Africa) L&H Re 39% 36% 25% 36% of which HGMs incl.
Slide 5: Strong flow of internal and external dividends since 2012
Strong flow of internal and external dividends since the introduction of Swiss Re's Business Unit structure in 2012 USD 10.6bn1 distribution to shareholders Swiss Re Ltd USD 5.3bn2 USD 2.7bn2 USD 1.4bn2 USD 1.8bn2 Corporate Reinsurance Admin Re® Solutions P&C L&H Swiss Re's capital management priori
Slide 6: All Business Units contributed to 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 7: 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 8: 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 9: 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 10: 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 11: Priorities for the Group in 2015
Priorities for the Group in 2015 • Focus on differentiation to generate value for clients and shareholders • Maintain focus on underwriting discipline and productivity measures Group • Allocate capital to risk portfolios that meet our strategic and financial targets • Continue to shift capital and t
Slide 12: New Group targets focusing on profitability and economic growth
Looking at 2016 and beyond, our new Group targets are focusing on profitability and economic growth Two Group financial targets to be introduced in 2016 Return on Equity ENW Per Share Growth (Year end ENW + dividends from current year 700bps above risk free (10-year US Gov Bonds1) divided by previou
Slide 13: Today's agenda
Today's agenda Swiss Re performance P&C re/insurance pricing pressure Protection gaps and growth opportunities Conclusion and Q&A Vontobel Summer Conference | 20 May 2015 13
Slide 14: Key drivers of P&C reinsurance pricing are mostly adding downward pressure
Key drivers of P&C reinsurance pricing are mostly adding downward pressure Pricing drivers Impact Comments Low interest rates Improve P&C underwriting discipline Greater recognition of risk mitigating tools under risk- Regulatory changes based and economic solvency frameworks Natural catastrophes No
Slide 15: Swiss Re has a different business model from alternative capital providers
Swiss Re has a different business model from alternative capital providers Collateralised Hedge fund Swiss Re reinsurers reinsurers 1. Main income driver Underwriting Investing Underwriting 2. Risk pool US Nat Cat concentrated Low severity only Diversified 3. Service level & client relationships 4.
Slide 16: We have a "high touch" interaction model
We have a "high touch" interaction model Visualisation of a client relationship Over the last four years… with a large Global client • …we have documented 1 986 Swiss Re meetings and 1 060 phone calls between Swiss Re employees (87 ) and those of a Global Client (99 ) • …we have documented more than
Slide 17: Differentiation through access and solutions
Differentiation through access and solutions • Swiss Re underwrites P&C business both directly Expected economic profit by source with clients and via brokers (split approximately Globals division, January 2015 renewals 50/50) • Our client centric focus has strengthened relationships throughout our
Slide 18: Key competencies driving Swiss Re's competitive advantage in underwriting
Key competencies driving Swiss Re's competitive advantage in underwriting Portfolio Hedging R&D Innovation, 151 Years steering large and structured Capital transactions strength In an inefficient Our retro and Re/insurance is a Focus on tailored Superior balance market, skilled hedging team knowledg
Slide 19: Initiatives to respond to cyber risk and big data opportunities
Swiss Re initiatives to respond to cyber risk challenges and big data opportunities Cyber risk • Engage with industry bodies to align wider industry positions and develop best practices • Collaborate with IT services companies and academic institutions on threat scenarios and modelling • Monitor exi
Slide 20: Today's agenda
Today's agenda Swiss Re performance P&C re/insurance pricing pressure Protection gaps and growth opportunities Conclusion and Q&A Vontobel Summer Conference | 20 May 2015 20
Slide 21: 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 22: Different solutions are available to address the insurance gap
Different solutions are available to address the insurance gap How to close the gap? Economic Solution type Description loss Foregone revenues Damaged public physical assets Risk transfer solutions Macro for (sub)sovereigns to cover Clean up costs their direct or indirect costs gap Emergency relief
Slide 23: Today's agenda
Today's agenda Swiss Re performance P&C re/insurance pricing pressure Protection gaps and growth opportunities Conclusion and Q&A Vontobel Summer Conference | 20 May 2015 23
Slide 24: Conclusion
Conclusion • Swiss Re benefits from geographic and business mix diversification. We reported another strong set of results in Q1 2015 • Swiss Re remains committed to maintaining a strong capital position whilst deploying capital towards profitable growth and creating shareholder value - delivering o
Slide 25: Q&A
Q&A Vontobel Summer Conference | 20 May 2015 25
Slide 26: 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 27: 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