Agostino Galvagni CEO Corporate Solutions5dd7b386-114b-4c71... · Investors' Day | Rüschlikon, 8 December 2015 65 On track to deliver against 2015 targets in USD bn in % 1 Share

Corporate Solutions

Agostino GalvagniCEO Corporate Solutions

Investors' Day | Rüschlikon, 8 December 2015 65

On track to deliver against 2015 targets

in USD bn in %

1 Share of Swiss Re Group’s Economic Net Worth deployed across Business Units (excl. Group Items), 30 June 2015Note: Gross premiums written including premium for insurance in derivative form, net of internal fronting for the Reinsurance Business Unit; ROE shown from 2012 as Corporate Solutions has been reported as separate segment from Q1 2012; 9M 2015 ROE is annualised

3.9

2.7

4.2

2.6

3.4

Gross premiums written Return on Equity

• Commercial insurance Business Unit of the Swiss Re Group

• A key opportunity for growth10%

Economic Net Worth1

Target range 2015: 4-5

2012 2013 2014 9M 2015

~4

2012 2013 2014 2015E20112010

7.4

9.6

12.5

18.7

Target range 2015: 10-15

Baseline year

Investors' Day | Rüschlikon, 8 December 2015

2010Baseline year

2015 Achieved

Employees ~1 000 ~2 400

Offices 32 52

Operating platform

Operational sustainability

Sales

Underwriting

Harmonise and upgrade

Improve and maintain

Corporate Solutions has transformed itself since launch in 2010…

66

Maintain excellence

Segment and upgrade


Liabilities

• Composition of funding changed with the introduction of subordinated debt

7.1

8.9

3.4

9.9

6.8

3.9

+26%Assets under management

Reinsurance recoverables

Other assets

-28%

2011 9M 2015

Assets

• Assets under management to gradually replace reinsurance recoverables which produce no investment income

2011 9M 2015

Equity

Subordinated debt

OtherLiabilities

2.3 2.4

17.817.0

…and so has our balance sheet, aligning with peers

0.5

Note: Corporate Solutions has been reported as separate segment from Q1 2012, with pro forma figures available for the prior year

in USD bn in USD bn


Corporate Solutions – Agenda

68

broadenand diversify client

base to increase access to risk

optimise resources and

platforms to support capital allocation

systematically allocate capital to risk pools / revenue streams

emphasise differentiation

I

II III

IV


Our portfolio is well diversified across lines of business, geographies and industries

By line of business By geography

By industry

Property

Casualty

Special Lines

GPW

29%

21%

36%

14%

Asia Pacific

EMEA

North America

Latin America

8%

GPW

Credit & Surety

9M 2015

57%

24%

11%

9M 2015

GPW

Note: Gross premiums written (GPW) including premium for insurance in derivative form, net of internal fronting; Special Lines includes Aviation & Space, Engineering, Marine and Energy Offshore; portfolio composition by industry relates to 9M 2015

14%

29%

21%

36%

5%4%

10%

16%

8%7%16%

4%3%

27%

Food & Tobacco

Retail & Trading

Life Sciences

Professional Services

Aviation

Transportation

Engineering & Construction

Credit, Agriculture, Weather

Energy & Utilities

Mining

I

II III

IV


We delivered strong profitable growth compared to peers since 2010…

70

Co

mb

ine

d r

ati

o 2

011

–2

01

4

Gross premiums growth 2010 – 2014 CAGR

80%

95%

110%13%

86%

16%-6% 5%

• Since 2010, continuously benchmarking ourselves against a selected set of 8 peers

Corporate Solutions

Insurers with global master policy capabilities

Insurers with multiregional focus

Insurers with wholesale focus

Source: Swiss Re Economic Research & Consulting Note: Peer group average weighted premium growth is in USD; Corporate Solutions combined ratio 2011-2013 is on basis of estimated total financial contribution to Swiss Re Group (ie Corporate Solutions business written, as shown at Investors' Day 2012, incl. development of historical loss reserves remaining in Reinsurance); combined ratio is shown starting 2011 as Corporate Solutions has been reported as separate segment from Q1 2012, with pro forma figures available for the prior year

Quadrants are determined based on average combined ratio and gross premiums compound annual growth rate (CAGR) over the years; bubble size = 2014 base

I

II III

IV


…but are very careful in the current market

71

Source: Swiss Re Economic Research & ConsultingNote: Peer group average weighted premium growth is in USD; due to consolidation in market number of peers reduced to 7 over the period

• Focused on maintaining underwriting discipline

Corporate Solutions

Insurers with global master policy capabilities

Insurers with multiregional focus

Insurers with wholesale focus

Gross premiums growth9M 2015 vs. 9M 2014

Co

mb

ine

d r

ati

o 9

M 2

01

5

92%

-19%

85%

104%

95%

-8% 15%-2%

Quadrants are determined based on average combined ratio and average gross premium growth rates; bubble size = 9M 2015 base where available, otherwise H1 2015

I

II III

IV


The commercial insurance market is very diverse and fragmented. Corporate Solutions ranks 25th overall...

72

Source: Swiss Re Economic Research & ConsultingNote: 2014 commercial insurance market premium: USD 740bn. In case of players writing business other than commercial insurance, only the commercial insurance premiums are shown

Players beyond top-30

Insurers with global master policy capabilities Insurers with regional focus

Insurers with wholesale focusInsurers with multiregional focus

Top 11-30 represent ~15% of market

Top-10 represent ~20% of market

Corporate Solutions

4.2

Top-30

I

II III

IV


…but is a leader in the Excess Layer Market, and expandinginto the next segment

2014 commercial insurance market premium: USD 740bn

70

130

270

210

Wholesale

Retail

Granularity of distribution

Administrative load

Deal complexity

Main characteristics

Deal size

in USD bn

Primary Lead (mid-sized corporations)

Excess Layers(large corporations)

SMEs

Workers’ Compensation and Commercial Auto

Pe

ne

tra

tio

n

Source: Swiss Re Economic Research & Consulting

60Global Master Policies

I

II III

IV


We are on our way to become a Primary Lead insurer

74

Ambition: Generate additional premiums of USD 1.0bn – 1.5bn by 2020

Primary Lead capabilities (in place or to be rolled-out in 2016)

Latin America: • Colombia (Casualty; 2016: Property)• Brazil (Property, Marine; 2016:

Casualty)

North America: • Canada (P&C)• US (Property, FinPro; 2016: Casualty)

EMEA: • Italy (P&C, FinPro, Marine) • France (P&C, Marine)• Germany (P&C; 2016: FinPro)

• UK (2016: P&C, FinPro)• Netherlands (2016: P&C)• South Africa (2016: P&C)• Switzerland (2016: P&C, FinPro)

Asia Pacific: • China (P&C)• Singapore (Casualty, FinPro)• Australia (2016: Property)

Capabilities being developed:

• Products: Develop primary products in line with local standards; ability to price primary products

• Services: Establish local services (esp. Claims and Risk Engineering)

• Systems: Integrate management of co-insurance panels into current platforms and processes

I

II III

IV


Our distribution footprint is global and growing…52 offices across 20 countries

Local presence & insurance license

Local insurance license

Local presence & reinsurance license

EMEA: 12 offices

North America: 23 offices

Note: Latin America includes Miami as hub for the region

75

Latin America: 7 offices

Asia Pacific: 10 offices

I

II III

IV


…and we strengthened our presence in our 12 key High Growth Markets

No local presenceAlready well covered Local presence to be strengthened

76

I

II III

IV

South AfricaOffice opened in 2015

SingaporeInsurance license obtained in 2013

IndiaTurkey UAEDubai office opened

in 2012

BrazilUBF acquisition in 2011

Chile

ColombiaSeguros Confianzaacquisition in 2014

Hong Kong

MalaysiaReinsurance license obtained in 2015, Origination/UW out of Singapore

ChinaSun Alliance China

acquisition in 2015

Mexico


We hired ~2 000 new employees since launch in October 2010…

77

2010Baseline year

33

2015 Achieved

Nu

mb

er

of

em

plo

yee

s

~1 000

~2 400

~600 Inorganic growth

Organic growth

Intra Group shifts ~600

Attrition

~200 (~600) ~600

Replacements

~25%~7%

X%Share of High Growth Markets

• Tailor-made onboarding programme

• Employee engagement index 12% above global financial insurance industry

• Share of staff in High Growth Markets increased to ~25%

I

II III

IV


• Productivity gains achieved through:

– Re-design and simplification of end-to-end underwriting process

– More efficient allocation of underwriting tasks, leveraging service centres

– Re-shaping of IT landscape

Work units per FTE Premiums per FTE

+23% productivity

increase

2013 H1 2015 2013 H1 2015

+10% productivity

increase

Note: Work units per FTE are transactional actions related to handling submissions, submitting quotes and binding transactions. FTE are weighted: underwriters/originators: 1, business support: 0.5, service centre support: 0.25; productivity metrics are rolling full-year views available since 2013; lower increase in Premium per FTE compared to Work units per FTE mainly reflects shift towards smaller deal size

~110~135

~2.9~3.2

in USD m

I

II III

IV

…and we significantly increased our productivity


Three key factors differentiate us from competitors

Corporate Solutions' value proposition

~500 transactions with USD 100m capacity or more

in 2014

Opens doors and attracts talents• Leading brand

• Financial strength

• "We are here to stay“

• Large net capacity

• Innovation

Supported by

– Superior underwriting knowledge

– Disciplined cycle management

– Proactive claims management

~40 innovative transactions

in 2014

I

II III

IV


Innovation capabilities in several areas, acknowledged by the market

80

Bespoke structures

• Multi-line/multi-yearsolutions

• Non-damage business interruption

• Parametric solutions

Derivative solutions

• Temperature and weather related derivatives

• Crop shortfall derivatives

New risks

• Cyber risk: Partnership with IBM

I

II III

IV

Awards

Innovative transaction of the year in Switzerland

2015

First solar radiation index transaction in China

2015

Energy Risk Weather House of the year

2012, 2013, 2014


Summary and Q&A

broadenand diversify client

base to increase access to risk

optimise resources and

platforms to support capital allocation

systematically allocate capital to risk pools / revenue streams

emphasise differentiation

I

II III

IV

Corporate Solutions – Agenda

81


• Ambition to grow, further increasing Corporate Solutions’ relevance to the Swiss Re Group

• Key initiatives for growth beyond 2015 are

– Expanding into Primary Lead and

– Further broadening of the footprint

• Continue to carefully navigate the current market with unchanged focus on profitability

• On track to deliver against 2015 targets

• Transformed into a larger and more solid player, with a

– Distinct value proposition building on our leading brand, large net capacity and innovation capabilities

– Leadership position in the Excess Layer Market

– Distribution network of 52 offices in 20 countries

Key messages

82

Conclusion

Outlook & priorities



Corporate calendar & contacts

Investor Relations contacts

Hotline E-mail+41 43 285 4444 [email protected]

Philippe Brahin Jutta Bopp Chris Menth +41 43 285 7212 +41 43 285 5877 +41 43 285 3878

Simone Lieberherr Iunia Rauch-Chisacof+41 43 285 4190 +41 43 285 7844

Corporate calendar

201623 February Annual Results 2015 Conference call16 March Publication of Annual Report 2015 and EVM 201522 April 152nd Annual General Meeting Zurich29 April First Quarter 2016 Results Conference call


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 any statement that does not directly relate to a historical fact or current fact.Forward-looking statements typically are identified by words or phrases such as “anticipate“, “assume“, “believe“, “continue“, “estimate“, “expect“, “foresee“, “intend“, “may increase“ and “may fluctuate“ and similar expressions or by future or conditional verbs such as “will“, “should“, “would“ and “could“. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Swiss Re’s actual results of operations, financial condition, solvency ratios, capital or liquidity positions or prospects to be materially different from any future results of operations, financial condition, solvency ratios, capital or liquidity positions or prospects expressed or implied by such statements or cause Swiss Re to not achieve its published targets. Such factors include, among others:

• further instability affecting the global financial system and developments related thereto;

• deterioration in global economic conditions;• Swiss Re’s ability to maintain sufficient liquidity and access to capital markets,

including sufficient liquidity to cover potential recapture of reinsurance agreements, early calls of debt or debt-like arrangements and collateral calls due to actual or perceived deterioration of Swiss Re’s financial strength or otherwise;

• the effect of market conditions, including the global equity and credit markets, and the level and volatility of equity prices, interest rates, credit spreads, currency values and other market indices, on Swiss Re’s investment assets;

• changes in Swiss Re’s investment result as a result of changes in its investment policy or the changed composition of its investment assets, and the impact of the timing of any such changes relative to changes in market conditions;

• uncertainties in valuing credit default swaps and other credit-related instruments;• possible inability to realise amounts on sales of securities on Swiss Re’s balance

sheet equivalent to their mark-to-market values recorded for accounting purposes;• the outcome of tax audits, the ability to realise tax loss carryforwards and the

ability to realise deferred tax assets (including by reason of the mix of earnings in a jurisdiction or deemed change of control), which could negatively impact future earnings;

• the possibility that Swiss Re’s hedging arrangements may not be effective;• the lowering or loss of one of the financial strength or other ratings of one or more

Swiss Re companies, and developments adversely affecting Swiss Re’s ability to achieve improved ratings;

• the cyclicality of the reinsurance industry;• uncertainties in estimating reserves;• uncertainties in estimating future claims for purposes of financial reporting,

particularly with respect to large natural catastrophes, as significant uncertainties may be involved in estimating losses from such events and preliminary estimates may be subject to change as new information becomes available;

• the frequency, severity and development of insured claim events;• acts of terrorism and acts of war;• mortality, morbidity and longevity experience;• policy renewal and lapse rates;• extraordinary events affecting Swiss Re’s clients and other counterparties,

such as bankruptcies, liquidations and other credit-related events;• current, pending and future legislation and regulation affecting Swiss Re or its

ceding companies, and the interpretation of legislation or regulations by regulators;

• legal actions or regulatory investigations or actions, including those in respect of industry requirements or business conduct rules of general applicability;

• changes in accounting standards;• significant investments, acquisitions or dispositions, and any delays,

unexpected costs or other issues experienced in connection with any such transactions;

• changing levels of competition; and• operational factors, including the efficacy of risk management and other

internal procedures in managing the foregoing risks.

These factors are not exhaustive. Swiss Re operates in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.This communication is not intended to be a recommendation to buy, sell or hold securities and does not constitute an offer for the sale of, or the solicitation of an offer to buy, securities in any jurisdiction, including the United States. Any such offer will only be made by means of a prospectus or offering memorandum, and in compliance with applicable securities laws.

Cautionary note on forward-looking statements

Documents

Agostino Galvagni CEO Corporate Solutions5dd7b386-114b-4c71... · Investors' Day | Rüschlikon, 8 December 2015 65 On track to deliver against 2015 targets in USD bn in % 1 Share