Swiss Re – Leading Global Re/Insurer Martin Müller, Chief Financial Officer Corporate Solutions The Octavian Seminar, Zurich, 16 January 2020
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 Knowledge Strength Swiss Re | January 2020 2
Swiss Re is well diversified across geographic regions and business segments Economic Net Worth 2 by segment Net premiums earned 1 by segment Net premiums earned 1 by region Life Capital Life Capital Corporate 5% 12% Solutions Asia Corporate 1 1% P&C Re 21% Americas Solutions 38% P&C Re 47% 9% 47% L&H Re 37% L&H Re EMEA 40% 32% Swiss Re benefits from geographic as well as business mix diversification and has the ability to reallocate capital to achieve profitable growth USD 34.5bn as at 31 December 2018; includes fee income from policyholders; does not reflect the exposure to HGMs through Principal Investments (PI) 1 2 Share of Swiss Re Group’s Economic Net Worth deployed across Business Units (excl. Group Items), 31 December 2018 Swiss Re | January 2020 3
Our client access capabilities are unique Client Access …while also partnering with non -insurance players We maintain strong direct relationships with our for innovative B2C insurance propositions reinsurance clients… Illustrative – Partnership portfolio Illustrative – Global client Swiss Re employees Swiss Re units Partner industries ... Technology Life Capital Americas Reinsurance APAC Real estate Corporate Solutions EMEA OEM Others Finance Client employees ... L&H Re P&C Re Current discussions with >90% >50% >100 of premiums from non-intermediated business non-insurance partners Swiss Re is a trusted partner for insurance and non-insurance companies Swiss Re | January 2020 4
We monetise our R&D capabilities, cementing Swiss Re as the Risk Knowledge leading knowledge company R&D value driver framework Strategic focus areas Project examples Insurance markets and cycle analysis Market intelligence Business steering Macroeconomic R&D Advance Nat Cat risk view Insurance beta Chinese cancer research Capital Nat Cat pricing tools Insurance alpha Efficiency allocation Risk engineering services Magnum Data, solutions, publications Life Guide Commer- Risk selection cialisation and pricing Analytics for contract wording Process re-engineering Group data integration 450 13 80 R&D FTEs R&D teams R&D programmes Swiss Re | January 2020 5
Our capital strength remains industry-leading Capital Strength Comparison of Group SST / Solvency II ratio 1 >260% • As a major risk absorber, Swiss Re’s first capital management priority is to ensure superior capitalisation 241% 234% at all times • The Group benefits from peer-leading diversification 202% resulting in superior capital efficiency and attractive capital management actions • Swiss Re has strong financial flexibility and is well positioned to respond to market shocks and growth Group SST ratio Group Average of Average of opportunities Solvency II reinsurance insurance peers equivalent peers Solvency Solvency II 2 3 ratio II ratio ratio 7/2019 Mid-year 2019 Swiss Re’s superior capital strength allows us to capture profitable growth opportunities and deliver attractive capital distribution to shareholders 1 Comparison was produced on a best effort basis Swiss Re | January 2020 6 2 Average of Hannover Re, Munich Re, SCOR 3 Average of Allianz, Aviva, AXA, Generali
Reinsurance Corporate Solutions Life Capital Differentiation is at the heart of what Reinsurance does Core Transactions Solutions Differentiation Add value to clients’ Simplify and drive Deliver innovative deals by original business by efficiencies in our combining our knowledge providing tech enabled traditional business and capital solutions We access risk pools through the three pillars of our strategy Swiss Re | January 2020 7
Reinsurance Corporate Solutions Life Capital Reinsurance has significantly grown and diversified its portfolio, building on core strengths Portfolio developments 2010-18 EVM premium (USD bn) Americas EMEA Asia Core strengths CAGR 21% 15.4 CAGR 7% 12.6 CAGR 4% Scale of the business • 3% 43% 10.9 34% 16% Strong client access • 7.8 7.4 22% 3% 1% 12% Diversification between • 31% 17% 15% P&C Re and L&H Re 50% 36% 21% 3.3 4% 28% 3% 18% 24% Risk knowledge 27% • 18% 11% 9% 12% 10% 7% 16% 9% 5% 20% 15% 12% 16% 14% 12% 6% 2010 2018 2010 2018 2010 2018 Property Nat Cat Casualty Specialty Life Health Swiss Re | January 2020 8
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 Solutions will grow • Strong push for price increases selectively in line with its strategic priorities • Improving productivity • Optimised reinsurance structure Combined ratio target 1 98% in 2021and further improvement De-commoditise our Grow with Expand through tech- core business differentiating assets driven solutions expected thereafter Access to commercial lines risk pool and to corporate clients remains strategic to Swiss Re Group 1 Assuming an average large Nat Cat loss burden and excluding prior-year reserve development Swiss Re | January 2020 9
Reinsurance Corporate Solutions Life Capital Corporate Solutions’ focused value proposition in a large pool of commercial insurance risks Commercial Corporate Solutions’ Our market presence Our proposition Segmentation insurance market addressable market Excess Layers: Gross premiums written, 2019 1 Bringing international programme Top 5 – 10 capabilities where few others excel 14% International Programmes: Large Corporates Tackling complex risks with bespoke 30% Entering now (turnover > USD 500m) solutions 7% 40% USD USD 40% ~800bn ~300bn 14% Providing innovative, efficient products Primary Lead: 20% which reduce costs for clients who do Mid Corporates Market entry in 2016 35% not want to pay for complexity (turnover >25m) SMEs Excess Layers Workers’ Comp International Programmes and Commercial Auto Serving only through innovative SMEs: Primary Lead business models and joint ventures, e.g. Only through JV Bradesco JV e.g. Bradesco SMEs (turnover <25m) 3% Workers’ Comp and 2010-19 commercial insurance Not targeted Commercial Auto: market premiums CAGR, None despite market softening Source: Swiss Re Institute 1 10 Swiss Re | January 2020
Reinsurance Corporate Solutions Life Capital Corporate Solutions is rebalancing towards a more diversified global portfolio Portfolio development year-on-year Portfolio split by region and sub-line % of gross premiums written Gross premiums written, USD bn ~4.4 USD 3.2bn USD 3.6bn 9% 1 1% Asia 3.6 22% 27% EMEA 0.3 3.2 10% Latin America 9% 0.3 -0.2 North America 59% 53% • Improved regional diversification 9M 2018 9M 2019 9M 2018 Pruning Price Exposure 9M 2019 FY 2021 increases growth estimate USD 3.2bn USD 3.6bn 14% 15% Other Specialty • Pruning activities mainly related to North American Lead Umbrella and 1 1% 12% Credit & Surety Excess & Surplus Casualty book Casualty 40% 36% • Price increases of 10% driven by strong improvements in Property Property • Exposure growth in targeted lines, mainly driven by large transactions • Pruning actions 35% 37% in Property and continued growth in Credit & Surety and A&H focused on Casualty • 2019 gross premiums written expected to be USD ~4.8bn 9M 2018 9M 2019 • Continued decrease in wholesale business 1 written 1 Regional business placed via specialised insurance hubs 11 Swiss Re | January 2020
Reinsurance Corporate Solutions Life Capital Good progress with the implementation of Corporate Solutions’ management actions Expected combined ratio development 1 10% ~5%pts ~6%pts ~1%pt 98% ~2%pts Normalised 2018 Portfolio pruning Rate increases Net expense savings Adjusted reinsurance 2021 target combined ratio combined ratio 1 structure ~25% of pruning Broad-based price ~USD 60m of the ADC 3 in place, quality increase 2 of On track to objective achieved 2021 operating tactical reinsurance Achievements year-to-date, and 10% achieved in expense savings for H2 2019 as well return to to date ~90% expected 9M 2019 target realised year- as strategic underwriting by end of 2020 to-date reinsurance for profitability 2020 and beyond 1 Assuming an average large Nat Cat loss burden and excluding prior-year reserve development 12 2 Year-on-year increase in risk- adjusted price quality of Corporate Solutions’ total portfolio Swiss Re | January 2020 3 Adverse Development Cover
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