Swiss Re Ag · SIX:SREN
Swiss Re — FY2008 Earnings Presentation
15 slides from Swiss Re's earnings presentation, May 7, 2009
Slide 1: Economic Value Management (EVM) 2008 results
ab Economic Value Management (EVM) 2008 results Zurich, 07 May 2009 ab EVM methodology EVM is Swiss Re’s integrated economic measurement and steering framework used for planning, pricing, reserving and managing the business – Splits performance of underwriting and investment activities – Recognise
Slide 2: Drivers of the EVM 2008 results
ab Drivers of the EVM 2008 results Decreasing risk-free rates led to a sharp increase of EVM balance sheet economic liabilities 5yr 2008 risk free rates Losses due to credit spread widening more than offset 4. 8% gains from lower risk-free 3. 8% US 5y interest rates 2. 8% Economic 1. 8% liabilities
Slide 3: EVM income statement: business segments
ab EVM income statement Business segments Property & Life & Asset Group CHF million Casualty Health Management Legacy items Total 2008 New business profit/loss 658 595 -12 366 -2 396 -2 782 -16 291 Previous years’ business profit/loss 618 -141 0 -2 624 -296 -2 443 Total profit/loss after capital cos
Slide 4: EVM key drivers: Life & Health and Asset Management
ab EVM 2008 key drivers Life & Health New business – EVM profit of CHF 595 million, compared to CHF 1 247 million in 2007 – Strong positive results for Life & Health traditional were offset by negative Variable Annuity performance. Admin Re® reported a strong new business result, but lower volume
Slide 5: EVM key drivers: Asset Management result and Legacy
ab EVM 2008 key drivers Asset Management result CHF billion 2.4 -11.2 -12.4 -1.2 -18.2 4.6 Mark-to-market Cost of funds Tax, foreign EVM income Capital costs EVM profit after investment exchange, before capital capital costs return expenses costs 2008 EVM results 07 May 2009 Slide 9 ab EVM 2008 key
Slide 6: EVM key drivers: Group items; EVM 2007 and 2008 balance sheet
ab EVM 2008 key drivers Group items New business – EVM loss for new business is CHF –2 782 million reflecting negative performance on portfolios excluded from the liability- based benchmark, negative mark-to-market movements on inflation-linked bonds and an increased valuation allowance on deferre
Slide 7: Group economic net worth and available capital
ab EVM 2008 Group economic net worth Group economic net worth (ENW) is the difference between the Overall economic market value of assets and the economic value of liabilities balance sheet ENW is the EVM estimate of shareholders’ equity Economic Market liabilities value assets CHF billion, as o
Slide 8: Economic net worth roll forward; MCEV and EVM comparison
ab EVM 2008 economic net worth roll forward CHF billion 50 2.3 40 38.4 30 20 -13.1 -1.3 -0.6 -7.1 18.6 10 0 Published ENW Opening B/S Income 2008 Dividend paid on Share repurchase Other incl. FX on ENW 2008 2007 adjustments 2008 common shares and MCS ENW conversions 2008 EVM results 07 May 2009 Slid
Slide 9: Appendix: EVM income statement Property & Casualty
ab Appendix 2008 EVM results 07 May 2009 Slide 17 ab EVM income statement Property & Casualty Property & CHF million Specialty Casualty Total 2008 New business profit/loss 624 34 658 Previous years business profit/loss 615 3 618 Total profit after capital costs 1 239 37 1 276 Release of capital cost
Slide 10: EVM income statement Life & Health
ab EVM 2008 income statement Life & Health Traditional Accident & CHF million Life Health Admin Re® Total 2008 New business profit/loss 185 78 332 595 Previous years business profit/loss -596 315 140 -141 Total profit/loss after capital costs -411 393 472 454 Release of capital costs 416 145 105 666
Slide 11: EVM capital allocation by segment
EVM capital allocation ab by segment EVM capital costs are allocated taking internal Property & Life & Asset Group risk, regulatory and rating CHF billion Casualty Health Management Legacy items Total agency capital requirements into Allocation at year end FX consideration. For illustration, this sl
Slide 12: Group sensitivities
ab EVM 2008 sensitivities Group sensitivities (1) Change in economic Change in 2008 net worth as of CHF billion new business profit 31.12.2008 Group sensitivities Change in frictional capital costs – Decrease by 100bps (from 4% to 3%) 0.2 1.1 10% decrease in equity/property capital values n/a -1.2 C
Slide 13: Life & Health specific sensitivities
ab EVM 2008 sensitivities Life & Health specific (1) Change in economic Change in 2008 net worth as of CHF billion new business profit 31.12.2008 Life & Health specific sensitivities Reduce lapse rates by 10% (e.g. from 8% to 7.2%) 0.1 1.5 Mortality and morbidity rates reduced by 5% – Mortality 0.2
Slide 14: Property & Casualty sensitivities; corporate calendar & contacts
ab EVM 2008 sensitivities Property & Casualty Change in economic Change in 2008 net worth as of CHF billion new business profit 31.12.2008 Property & Casualty specific sensitivities Change in weighted average term to settlement – Increase by 10% 0.1 0.5 – Decrease by 10% -0.1 -0.5 Projected future c
Slide 15: Cautionary note on non-GAAP financial measures
Cautionary note on ab non-GAAP financial measures This presentation on Economic Value Management (“EVM”) contains non- GAAP financial measures. EVM is not based on US GAAP, which are the principles in accordance with which Swiss Re prepares its financial statements, and should not be viewed as a sub