Swiss Re Ag · SIX:SREN
Swiss Re — Investor Day (September 2013)
34 slides from Swiss Re's investor day presentation, Sep 9, 2013
Slide 1: Creating the future
Creating the future Investors and Media meeting Monte Carlo, 9 September 2013
Slide 2: Today's agenda
Today's agenda Introduction Michel M. Liès, Group CEO Current market environment Christian Mumenthaler, CEO Reinsurance and Differentiation through Matthias Weber, Group CUO knowledge Outlook Michel M. Liès, Group CEO Questions & answers Investors and Media meeting | Monte Carlo | 9 Septem
Slide 3: Introduction
Introduction Michel M. Liès, Group CEO Investors and Media meeting | Monte Carlo | 9 September 2013 3
Slide 4: Our first treaty ("Helvetia Allgemeine"), 1863 Our first office, 1864
Our first treaty ("Helvetia Allgemeine"), 1863 Our first office, 1864 Investors and Media meeting | Monte Carlo | 9 September 2013 4
Slide 5: A short journey through our history
A short journey through our history Some of our first underwriters (Fire), 1890 Investors and Media meeting | Monte Carlo | 9 September 2013 5
Slide 6: Our generations theme
Our generations theme Focus on four strategically important topics Advancing Funding Managing Partnering sustainable longer lives climate and for food energy natural security solutions disaster risk Investors and Media meeting | Monte Carlo | 9 September 2013 6
Slide 7: Priorities for the Group CEO
Priorities for the Group CEO Perform and grow Strategy unchanged, focus on execution, keeping the pressure on Group strategy Continued emphasis on high growth markets for all business lines Productivity emphasis to control mgmt. expenses at lower levels L&H Reinsurance: ROEs expected to impr
Slide 8: Current market environment
Current market environment Investors and Media meeting | Monte Carlo | 9 September 2013 8
Slide 9: Advert for our US branch, 1934
Advert for our US branch, 1934 Investors and Media meeting | Monte Carlo | 9 September 2013 9
Slide 10: Three year pricing outlook from Monte Carlo 2012
Three year pricing outlook from Monte Carlo 2012 Prices High Low ? Continuous reserve releases Nat Cats Low inflation ? Industry capitalisation Factors leading to lower prices Low interest rates Regulatory changes Factors leading to higher prices Drivers of re-/ insurance prices Investors and Media
Slide 11: What happened since?
What happened since? Impact of drivers on reinsurance industry pricing Pricing driver Impact Comments Low interest rates Despite recent increases, rates are still near historic lows Delay in Solvency II implementation, but no change in global pace of Regulatory changes regulatory change Natural cata
Slide 12: Alternative capital is entering the Nat Cat re/insurance market
Alternative capital is entering the Nat Cat re/insurance market Product split Products Investor Type Growth Asset Managers 5% Dedicated ILS Funds ILS Hedge Funds Pension Funds 40% Dedicated ILS Funds ILW Reinsurers 47% Collateralised Dedicated ILS Funds Reinsurance Hedge Funds 8% ILS
Slide 13: Alternative capital focuses on peak cat perils
Alternative capital focuses on peak cat perils Distribution by peril and segment Alternative capital plays a 5% significant role in markets with low entry barriers and high 25% US cat margins Europe cat Other Alternative capital is collateralised; collateral is tied 70% up post-event for potenti
Slide 14: Alternative capital has regained market share
Alternative capital has regained market share Estimated size of global market Share of US market USDbn 25% 45 40 20% 35 30 15% 25 20 10% 15 10 5% 5 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2005 2006 2007 2008 2009 2010 2011 2012 2013e Sidecar ILW Collateralised ILS Recent growth mainly d
Slide 15: Cat bond trading implies a new price baseline has been reached
Cat bond trading implies a new price baseline has been reached Cat bond secondary market spreads Example: US exposed cat bonds with an expected loss between 1.25% and 2.5% in% in% 12 12 Historically, capital market prices have been volatile, 9 9 driven by changing supply 6 6 and demand dynamics 3
Slide 16: Demand for Nat Cat capacity will continue to increase
Demand for Nat Cat capacity will continue to increase Increase in largest industry loss scenarios per region… … is driven by USD bn Growth in exposed economic values Growing middle class in High Growth Markets (HGM) leading to higher insurance penetration Governments moving Nat Cat risks into
Slide 17: Renewal 2013 – 2014
Renewal 2013 – 2014 Line of business trends Drivers of change Industry outlook Property: Nat Cat rates are experiencing Increase of alternative capacity decreases, but are expected to Stable ILS spreads since April stabilise in 2014 Regulatory changes (Solvency II) Demand for Nat Cat capac
Slide 18: Renewal 2013 – 2014
Renewal 2013 – 2014 Line of business trends Drivers of change Industry outlook Liability: Hardening US insurance market, Interest rate environment other segments lack clear direction Reserves in recent underwriting Broad rate increases likely in case of years are showing signs of strain dete
Slide 19: Differentiation through knowledge
Differentiation through knowledge Investors and Media meeting | Monte Carlo | 9 September 2013 19
Slide 20: Postcard from a Swiss Re client manager on his way to Brazil, 1918
Postcard from a Swiss Re client manager on his way to Brazil, 1918 Investors and Media meeting | Monte Carlo | 9 September 2013 20
Slide 21: Differentiated through history
Differentiated through history Swiss Re is a global operator, with over 60 offices in more than 20 countries Swiss Re has both a superior capital rating1 and 150 years of experience in providing reinsurance solutions for our clients A long history of paying claims is valued by clients; during
Slide 22: Differentiation through access and solutions
Differentiation through access and solutions Swiss Re underwrites P&C business both Expected economic profit by source directly with clients and via brokers (split Globals division, January 2013 renewals approximately 50/50) Our client centric focus has strengthened relationships throughout our
Slide 23: Comparison of business models along the reinsurance value chain
Comparison of business models along the reinsurance value chain Non- Alternative Attribute Description Swiss Re diversified Capital Reinsurers Capitalization 1. Capital raising Quick access to capital when needed, i.e. capability post-event 2. Access to business Global physical presence, direc
Slide 24: Services and expertise
Services and expertise CatNet® CatNet® CatNet® is Swiss Re's online Number of hazard maps provided per natural hazard information month and mapping system for clients Data is combined with Google Maps™ and satellite imagery Facilitates assessment of natural hazard exposure for local and regional
Slide 25: CatNet demonstration
CatNet® demonstration Investors and Media meeting | Monte Carlo | 9 September 2013 25
Slide 26: Cat Net proved its value in Calgary flood
Cat Net® Proved its value in Calgary flood Flood footprint Calgary 2013 Swiss Re Global Flood Zones: Flood footprint 2013: PERILS ltd. Investors and Media meeting | Monte Carlo | 9 September 2013 26
Slide 27: Services and expertise
Services and expertise Providing additional value to our clients Property Engineering Tailored underwriting PUMA: training, from Project Underwriting introductory courses to Management advanced seminars Application Agro Casualty Partnering on new TWISTER: On line risk assessment product deve
Slide 28: Outlook
Outlook Michel M. Liès, Group CEO Investors and Media meeting | Monte Carlo | 9 September 2013 28
Slide 29: Creating the future
Creating the future Our headquarters, 2013 Investors and Media meeting | Monte Carlo | 9 September 2013 29
Slide 30: Summary
Summary Alternative capital increases competition and capacity, but does not challenge Swiss Re's business model Swiss Re is a knowledge company with permanent contact to and a deep understanding of our clients throughout the entire organisation Through our differentiation of products and serv
Slide 31: Our new headquarters, 2017
Our new headquarters, 2017 Investors and Media meeting | Monte Carlo | 9 September 2013 31
Slide 32: Questions & answers
Questions & answers Investors and Media meeting | Monte Carlo | 9 September 2013 32
Slide 33: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 07 November 2013 Third Quarter 2013 results Conference call 20 February 2014 Annual Results Conference call 18 March 2014 Publication of Annual Report 2013 and EVM 2013 24 March 2014 AGM Briefing Call Conference call 11 April 2014 150th Annual General
Slide 34: 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