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Swiss Re — Bellevue Meets Management Seminar (January 2014)
39 slides from Swiss Re's conference presentation, Jan 9, 2014
Slide 1: Bellevue Meets Management Seminar: Capturing Growth: Managing a multi-speed economy
Bellevue Meets Management Seminar: "Capturing Growth: Managing a multi- speed economy" Michel M. Liès, Group CEO Zurich, 09 January 2014
Slide 2: Agenda
Agenda Michel M. Liès Multispeed economies Group CEO Emerging Asia Swiss Re capturing growth opportunities Q&A Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 2
Slide 3: Economic growth picking up again – but at different speeds
Economic growth picking up again – but at different speeds 10% Real GDP growth 8% 6% 4% 2% 0% * * * -2% -4% -6% Emerging markets Advanced economies World * Expected Source: Swiss Re Economic Research & Consulting Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 3
Slide 4: The 2012 S-curve for non-life insurance
The 2012 S-curve for non-life insurance Insurance Direct penetration premiums as a % of GDP, 2010 (premiums as a % of GDP) 6% 5% United States Switzerland 4% Germany France 3% South Africa 2% Kenya Luxembourg Brazil China Russia 1% Zambia Angola India TanzaniaNigeria 0% 0.1 1 10 100 1000 GDP per cap
Slide 5: The 2012 S-curve for life insurance
The 2012 S-curve for life insurance Direct premiums as a % of GDP, 2009 Insurance penetration (premiums as a % of GDP) 6% France Switzerland 5% 4% United States 3% India Germany 2% Brazil China 1% Kenya Mexico Zambia 0% Tanzania Nigeria Angola Russia 0.1 1 10 100 GDP per capita in 1'000 USD Source:
Slide 6: High growth markets (HGMs)
High growth markets (HGMs) Premium growth with strong compounding effect Market premium (real) growth 2000-2013E CAGR Cumulative Emerging Asia 14% 468% Emerging Asia has so far sustained the 213% highest growth rates MENA and Turkey 9% Latin America 8% 173% CEE 6% 124% Sub-Saharan Africa 3% 55% 233%
Slide 7: Structural change in insurance markets since 1962
Structural change in insurance markets since 1962 % of global non-life premiums % of global life premiums 100% 4% 4% 5% 3% 3% 5% 3% 13% 5% 4% 13% 90% 8% 11% 9% 5% 23% 4% 6% 80% 22% 30% 28% 11% 11% 8% 70% 30% 28% 30% 10% 60% 23% 30% 24% 50% 26% 33% 40% 33% 74% 70% 28% 30% 57% 52% 20% 41% 43% 36% 33%
Slide 8: Agenda
Agenda Michel M. Liès Multispeed economies Group CEO Emerging Asia Swiss Re capturing growth opportunities Q&A Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 8
Slide 9: Major drivers behind increasing demand for insurance in Emerging Asian markets
Major drivers behind increasing demand for insurance in Emerging Asian markets 1 Economic growth Urbanisation trends and infrastructure 2 growth 3 Natural catastrophe protection gap 4 Large mortality protection gap Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 9
Slide 10: Economic growth
Economic growth Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 10
Slide 11: Economic growth will drive insurance demand in Emerging Asia
Economic growth will drive insurance demand in Emerging Asia Share of global GDP 100% Global GDP Industrialised markets share of CEE 80% emerging Asia reaches 25% in Africa 60% 2020 Latin America 40% Middle East 20% Emerging Asia 20.3% 25.3% 7.0% 8.7% 14.8% 0% 2000 2005 2010 2015F 2020F Share of glo
Slide 12: Three of the world's five largest economies will be in Asia by 2023
Three of the world’s five largest economies will be in Asia by 2023 120 Australia 100 GDP per capita in 2023 (USD thousand) Singapore 80 Hong Kong Japan 60 South Korea 40 Taiwan Malaysia 20 China Thailand Indonesia Philippines Vietnam India 0 (20) 1% 2% 3% 4% 5% 6% 7% 8% 9% Real GDP growth (2013-202
Slide 13: Urbanisation trends and infrastructure growth
Urbanisation trends and infrastructure growth Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 13
Slide 14: More than half of the world's population now lives in urban areas
More than half of the world's population now lives in urban areas Urbanisation rate, % Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 14
Slide 15: The future growth of urban population will be driven by emerging markets
The future growth of urban population will be driven by emerging markets Growth of urban population, CAGR 2010-2030F Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 15
Slide 16: Urbanisation provides an opportunity: top 10 megacities in Asia by 2025
Urbanisation provides an opportunity: By 2025, 7 of the world's top 10 megacities will be in Asia Population in millions (2025) Tokyo 38.66 Delhi 32.94 Shanghai 28.40 Mumbai (Bombay) 26.56 Ciudad de México (Mexico City) 24.58 New York-Newark 23.57 São Paulo 23.17 Dhaka 22.91 Beijing 22.63 Karachi 20
Slide 17: Urbanisation and implications for insurance
Urbanisation and implications for insurance Higher income and wealth drives demand for motor, home and Economic savings products Industrialisation and higher concentration drives growth of commercial lines Longevity and reduced inter-generational support will create Social opportunities for ol
Slide 18: Infrastructure spending will expand the commercial insurance market
Infrastructure spending will expand the commercial insurance market Industrialisation will drive demand for commercial insurance in emerging markets – this will benefit construction related lines, surety, marine and trade credit insurance Additional commercial insurance premiums from infrastruct
Slide 19: Natural catastrophe protection gap
Natural catastrophe protection gap Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 19
Slide 20: Large gap between insured and economic natural catastrophe losses
Large gap between insured and economic natural catastrophe losses Catastrophe related losses in USD billion, at 2013 prices 450 400 350 300 250 200 150 100 50 0 2005 2006 2007 2008 2009 2010 2011 2012 2013E Insured losses Uninsured losses Note: Insured losses plus uninsured losses=economic losses So
Slide 21: Demand for natural catastrophe capacity will continue to increase
Demand for natural catastrophe capacity will continue to increase Increase in largest industry loss scenarios per region 2012 vs. 2020E EQ: Earthquake (500 yrs) TC/WS: Tropical Cyclones/Winter Storms (100 yrs); TC includes storm surge FL: River Flood (250 yrs) Demand for nat cat insurance expected
Slide 22: Demand for natural catastrophe re/insurance will increase with rising value concentration
Demand for natural catastrophe re/insurance will increase with rising value concentration River flood exposure and storm surge exposure in China's Pearl River Delta Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 22 Source: Swiss Re GEO Services
Slide 23: Differentiated through knowledge, expertise and solutions
Differentiated through knowledge, expertise and solutions 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 expo
Slide 24: Large mortality protection gap
Large mortality protection gap Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 24
Slide 25: The mortality protection gap is defined as…
The mortality protection gap is defined as… … the difference between the protection needed and the protection in- place to maintain dependents living standards following the death of the primary breadwinner Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 25
Slide 26: Life insurance opportunities – closing the mortality protection gap
Life insurance opportunities – eg closing the mortality protection gap Asia - Pacific Mortality protection gap per working person with dependents in USDk 300 250 200 150 100 50 0 South Korea Vietnam Japan India Thailand Australia Hong Kong Taiwan Indonesia Singapore China Malaysia Source: Swiss Re A
Slide 27: Differentiated through knowledge, expertise and solutions
Differentiated through knowledge, expertise and solutions Global Claims and Underwriting Manuals – Global Underwriting Manual (Lifeguide) is consistently ranked as the leading underwriting manual world wide, available in 73 countries, in 11 languages and has over 1 million page hits every month –
Slide 28: Agenda
Agenda Michel M. Liès Multispeed economies Group CEO Emerging Asia Swiss Re capturing growth opportunities Q&A Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 28
Slide 29: 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 30: P&C Underwriting
P&C Underwriting Strong and stable underwriting track record 130% 5% 120% 124.0 108.4 4% 117.0 110% 114.1 101.1 98.3 98.2 97.3 100% 104.0 107.8 93.9 104.7 95.4 93.4 3% 98.4 98.4 97.9 97.4 90% 93.7 96.8 90.4 90.2 2% 80% 83.1 84.8 1% 70% 60% 0% 1 5-year US Treasury risk-free rates (RHS) Group combined
Slide 31: Group financial targets
Group financial targets Well on track ROE 700 bps above risk free EPS growth 10% average ENW per share growth plus average over 5 years annual growth rate, adjusted dividends 10% avg. annual (2011-2015) for special dividends1 growth rate over 5 years in % in USD2 in USD2 144.5 13.6 119.4 13.4 11.9 1
Slide 32: Swiss Re is broadly diversified
Swiss Re is broadly diversified HGM contribution growing in all geographies Swiss Re Group net premiums earned1 2012 (USD 25.4bn) by region (in USD bn) 9.6 10.7 5.2 Americas EMEA Asia 38% 42% 20% of which HGMs: ~3% ~3% ~9% ≈ 15% Well on track towards target of 20-25% of premiums from HGMs by 2015
Slide 33: Swiss Re's focus high growth markets
Swiss Re's focus high growth markets Five markets jointly targeted across Swiss Re Group Turkey China South Korea Mexico UAE India Hong Kong Colombia Singapore Brazil Indonesia Chile South Africa Reinsurance and Corporate Solutions Corporate Solutions Capturing Growth | Bellevue Meets Management Sem
Slide 34: Actions for profitable growth in the HGMs
Actions for profitable growth in the HGMs Dedicated strategies across all lines of business HGM initiatives Reinsurance: organic growth, partnerships e.g. with local market reinsurers Corporate Solutions: organic growth, new offices, acquisitions Lines of business with particular HGM angle: –
Slide 35: Looking beyond 2015
Looking beyond 2015 Longer-term strategic themes (selection) Management priorities (selection) Risk pool for nat cat grows fast, attracting Capital structure and increasing amounts of management alternative capital Strong growth in high growth markets fuel Profitability demand in all lines of requir
Slide 36: Thank you
Thank you Capturing Growth | Bellevue Meets Management Seminar | Zurich, 09 January 2014 36
Slide 37: Corporate calendar & contacts
Corporate calendar & contacts Corporate calendar 20 February 2014 Annual Results 2013 Conference call 18 March 2014 Publication of Annual Report 2013 and EVM 2013 24 March 2014 Annual General Meeting (AGM) Briefing Conference call 11 April 2014 150th Annual General Meeting Zurich 7 May 2014 First Qu
Slide 38: 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
Slide 39: Legal notice
Legal notice ©2014 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivatives of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re. Although all the information used was taken from reliable sou
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