Swiss Re Ag · SIX:SREN
Swiss Re — H1 2023 Earnings Presentation
34 slides from Swiss Re's earnings presentation, Aug 4, 2023
Slide 1: Half-year 2023 Results
Half-year 2023 Results Swiss Re investor and analyst presentation Zurich, 4 August 2023
Slide 2: Solid performance in the first half of 2023
Solid performance in the first half of 2023 Swiss Re Group Q2 2023 H1 2023 FY 2023 key figures key figures targets P&C Net income Reinsurance Combined ratio 92.1% 94.7% <95% (USD m) 1 447 804 L&H 405 Reinsurance Net income (USD) 219m 393m ~900m 157 Q2 22 Q2 23 H1 22 H1 23 Corporate Premium +4.7% +4.
Slide 3: Strong second quarter contributed to a solid half-year underwriting result in P&C Reinsurance
Strong second quarter contributed to a solid half-year underwriting result in P&C Reinsurance Reported combined ratio 120% Underwriting performance in H1 2023 115% • H1 2023 combined ratio reflects improved margins from 110% year-to-date renewals and slightly lower-than-expected large nat cat losses
Slide 4: Continued strong underwriting profitability in Corporate Solutions
Continued strong underwriting profitability in Corporate Solutions Reported combined ratio 135% 130% Underwriting performance in H1 2023 125% • Strong track record of underwriting profitability since 120% turnaround with H1 2023 combined ratio benefitting 115% from low exposure to nat cat events and
Slide 5: L&H Reinsurance profitability returning to pre-pandemic levels
L&H Reinsurance profitability returning to pre-pandemic levels Net income and US excess mortality 500 15% 393 Performance in H1 2023 400 10% 300 200 • Reported net income of USD 393m for H1 2023 was 5% affected by elevated mortality in the US from the recent 100 winter months • L&H Re continues to t
Slide 6: Recurring investment income continues to benefit from higher interest rate environment
Recurring investment income continues to benefit from higher interest rate environment Recurring 5.5 income yield1 and fixed income reinvestment yield (%) 5.0 4.6% 4.6% 4.5 fixed income reinvestment 4.0 3.5% yield in Q2 2023 3.5 3.0 2.5 Recurring income increased by 2.0 USD ~420m 1.5 in H1 2023 vs.
Slide 7: P&C Reinsurance achieved strong price increases in year-to-date renewals
P&C Reinsurance achieved strong price increases in year-to-date renewals Price change1 +18% Year-to-date renewals Higher loss assumptions +13% • 82% of treaty business renewed • +18% price increase, with rate increases most USD bn Premium volume change +5% pronounced in nat cat 17.1 • +13% higher lo
Slide 8: Year-to-date renewals feature improved pricing and benefit of higher interest rates
Year-to-date renewals feature improved pricing and benefit of higher interest rates, while focus on portfolio quality was maintained Gross premium volume by line of business1 (USD bn) Gross premium volume by region1 (USD bn) Outcome Economic Outcome Up for Premium Up for Premium YTD combined ratio Y
Slide 9: Financial highlights
Financial highlights 9
Slide 10: Key figures
Key figures Corporate Total Total USD m, unless otherwise stated P&C Re L&H Re Solutions Group items H1 2023 H1 2022 • Premiums earned and fee income 11 369 7 761 2 566 441 22 137 21 204 • Net income/loss 904 393 323 -173 1 447 157 • Return on investments 2.0% 4.3% 2.6% 3.5% 2.8% 1.2% • Combined rat
Slide 11: P&C Reinsurance underwriting result reflects improved pricing and low nat cat burden
P&C Reinsurance underwriting result reflects improved pricing and low nat cat burden in the second quarter Net premiums earned Net operating margin1 (%) Combined ratio (%) 115.8 +6.3%pts 100.5 11.6 97.4 98.5 94.4 94.72 92.9 USD 11.4bn in H1 2023 5.3 6.7 10.0 H1 2017 H1 2018 H1 2019 H1 2020 H1 20213
Slide 12: L&H Reinsurance net income on track to return to pre-pandemic levels
L&H Reinsurance net income on track to return to pre-pandemic levels Net premiums earned Net operating margin1 (%) Recurring income yield2 and ROI (%) and fee income +5.4%pts 3.9 3.4 3.3 3.4 3.1 2.9 3.0 7.0 1.1 1.6 4.2 4.4 4.1 4.3 3.6 3.2 2.7 USD 7.8bn in H1 2023 9.3 10.9 H1 2017 H1 2018 H1 2019 H1
Slide 13: Corporate Solutions continues to deliver strong results
Corporate Solutions continues to deliver strong results Net premiums earned Net operating margin1 (%) Combined ratio (%) 132.8 +5.2%pts 118.7 15.3 104.5 101.7 10.1 92.7 93.2 91.0 USD 2.6bn in H1 2023 20.1 23.7 H1 2017 H1 2018 H1 2019 H1 20203 H1 2021 H1 2022 H1 20232 7.0 3.5 USD 2.9bn • H1 2023 comb
Slide 14: iptiQ result improved with focus on achieving break-even in 2025
iptiQ result improved with focus on achieving break-even in 2025 Gross premiums written1 (USD m) Adjusted gross income2 (USD m) Earnings before interest CAGR and tax (EBIT) +50% 476 455 +21% 333 23 95 143 19 USD -138m in H1 2023 H1 2019 H1 2020 H1 2021 H1 2022 H1 2023 • Gross premiums written and po
Slide 15: Investment result driven by strong recurring income
Investment result driven by strong recurring income Return on investments (ROI) Investment portfolio positioning (USD bn) Net investment income (USD m) Recurring income yield3 (%) 3.3 104.3 105.7 2.9 2.9 2.9 0.6 2.8% 0.4 12.3 11.2 2.5 2.3 2.3 1 686 42.1 47.1 1 609 1 527 in H1 2023 1 521 1 530 237 15
Slide 16: Appendix
Appendix 16
Slide 17: Business segment results H1 2023
Business segment results H1 2023 Income statement Corporate Total Total USD m P&C Re L&H Re Solutions Group items Consolidation H1 2023 H1 2022 Revenues Gross premiums written 15 316 8 702 3 572 782 -598 27 774 26 603 Net premiums written 14 319 7 980 2 372 665 - 25 336 24 582 Change in unearned pre
Slide 18: Business segment results Q2 2023
Business segment results Q2 2023 Income statement Corporate Total Total USD m P&C Re L&H Re Solutions Group items Consolidation Q2 2023 Q2 2022 Revenues Gross premiums written 6 090 4 115 1 710 263 -169 12 009 11 508 Net premiums written 5 808 3 731 1 282 232 - 11 053 10 645 Change in unearned premi
Slide 19: Business segment results H1 2023 - Balance sheet
Business segment results H1 2023 Balance sheet Corporate End End 30 June 2023, USD m P&C Re L&H Re Solutions Group items Consolidation H1 2023 FY 2022 Assets Fixed income securities 42 745 26 828 7 910 559 - 78 042 74 573 Equity securities 58 55 15 560 - 688 2 114 Other investments 17 359 4 582 357
Slide 20: Total equity and ROE H1 2023
Total equity and ROE H1 2023 Total USD m H1 2023 Shareholders' equity at 31 December 2022 12 699 Net income attributable to shareholders 1 447 Dividends -1 850 Net change in unrealised gains/losses 428 Other (incl. fx) -44 Shareholders' equity at 30 June 2023 12 680 Non-controlling interests 174 Tot
Slide 21: Change in shareholders' equity mainly driven by net income and dividends
Change in shareholders' equity mainly driven by net income and dividends USD m Gov bonds 0.2 Corp bonds 0.2 Other 0.1 1 447 Tax -0.1 - 1 850 - 44 12 699 428 12 680 Shareholders' Net income Dividends Net change in Other 2 Shareholders' equity attributable to shareholders unrealised equity 31 December
Slide 22: P&C underwriting performance
P&C underwriting performance P&C Reinsurance and Corporate Solutions Combined ratio Main drivers of change year-to-date Net premiums earned (USD m) P&C Reinsurance Q2 2022 Q2 20231 H1 2022 H1 20231 Q2 2023 H1 2023 Property 101.1% 70.7% 98.8% 74.9% • Improvement reflects strong underlying profitabili
Slide 23: P&C Reinsurance: combined ratio split
P&C Reinsurance: combined ratio split Quarterly performance (%) Year-to-date performance (%) Main drivers of change year-to-date 100 97.6 100 98.5 94.7 95 95 • Current accident year (CAY) loss ratio excluding large losses 92.1 8.9 9.3 0.9 0.7 5.9 benefitted from improved margins at January and April
Slide 24: Corporate Solutions: combined ratio split
Corporate Solutions: combined ratio split Quarterly performance (%) Year-to-date performance (%) Main drivers of change year-to-date 100 100 93.2 95 95 91.0 • Current accident year (CAY) loss ratio excluding large losses 91.4 91.7 3.5 0.8 90 1.8 90 confirms improved resilience of the business and di
Slide 25: Return on investments (ROI) H1 2023
Return on investments (ROI) H1 2023 Corporate Total Total USD m P&C Re L&H Re Solutions Group items Consolidation H1 2023 H1 2022 Investment related net investment income 779 655 173 131 -211 1 527 1 017 Fixed income 509 508 108 8 - 1 133 882 Equities and alternative investments – incl. RE, PE, HF 1
Slide 26: Return on investments (ROI) Q2 2023
Return on investments (ROI) Q2 2023 Corporate Total Total USD m P&C Re L&H Re Solutions Group items Consolidation Q2 2023 Q2 2022 Investment related net investment income 414 342 93 72 -109 812 550 Fixed income 272 255 56 4 - 587 445 Equities and alternative investments – incl. RE, PE, HF 98 9 1 18
Slide 27: Overall investment portfolio
Overall investment portfolio Other investments (incl. policy loans) Cash and cash equivalents Short-term investments Mortgages and other loans 7% 4% 4% 7% Equities 5% 34% Government bonds 39% Credit bonds Corporate End End USD bn1 P&C Re L&H Re Solutions Group items Consolidation H1 2023 FY 2022 Cas
Slide 28: Fixed income securities
Fixed income securities Government Credit USD m bonds bonds End FY 2022 37 722 36 851 • Decrease in government bonds driven by net sales End H1 2023 36 699 41 343 • Increase in credit investments reflects net purchases • Credit bonds include corporate bonds (USD 36.7bn) and securitised products (USD
Slide 29: Equities and alternative investments
Equities and alternative investments End End USD m FY 2022 H1 2023 Equity securities 1 535 124 Real estate by geography Private equity 3 301 3 617 6% 5% Switzerland Hedge funds 9 8 US 22% Real estate1 5 752 5 795 50% Germany United Kingdom Principal Investments 1 660 1 598 Other Direct Equity securi
Slide 30: 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 -1.3 -0.5 +1.3 Estimated impact on economic net worth (EVM) -1.3 -0.5 +1.3 Estimated impact on income/loss before income tax expens
Slide 31: Corporate calendar and contacts
Corporate calendar and contacts Corporate calendar 2023 03 November 9M 2023 Results Conference call 01 December Investors’ Day 2023 Zurich 2024 16 February Annual Results 2023 Conference call 13 March Publication of Annual Report 2023 12 April 160th Annual General Meeting Zurich Investor Relations c
Slide 32: Half-year 2023 Results
(in) Swiss Re Half-year 2023 Results 32
Slide 33: 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 34: Legal notice
Legal notice ©2023 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