Swiss Re AG · SIX:SREN
Swiss Re — Swiss Re Media Conference, Monte Carlo 2015
27 slides from Swiss Re's conference presentation, Sep 14, 2015
Slide 1: Future ready
Future ready Media conference, Monte Carlo, 14 September 2015
Slide 2: Today's agenda
Today's agenda Michel M. Liès Narrowing the protection gap Group Chief Executive Officer Technology will change the Christian Mumenthaler insurance industry CEO Reinsurance Matthias Weber Drivers of underwriting performance Group Chief Underwriting Officer Michel M. Liès Summary and Outlook Group Ch
Slide 3: Narrowing the protection gap
Narrowing the protection gap Michel M. Liès, Group Chief Executive Officer Media Conference | Monte Carlo | 14 September 2015 3
Slide 4: Economic growth and wealth are the most important drivers for insurance market growth
Economic growth and wealth are the most important drivers for insurance market growth Premiums as a % of GDP United States • Swiss Re’s insurance “S-Curve” illustrates 4% Switzerland Canada the various stages of Germany insurance penetration Venezuela France • Insurance 3% penetration rises Spain So
Slide 5: Significant potential for insurance industry to narrow the protection gap
Significant potential for insurance industry to narrow the protection gap USD bn 450 • Economic development, Uninsured losses Insured losses population growth and a 400 10-year moving average insured losses higher concentration of 10-year moving average total economic losses 350 assets in exposed ar
Slide 6: Different solutions are available to address the insurance gap
Different solutions are available to address the insurance gap How to close the gap? Economic Solution type Description loss Foregone revenues Damaged public Risk transfer solutions physical assets for (sub)sovereigns to cover Macro their direct or indirect costs gap Clean up costs Emergency relief
Slide 7: Swiss Re Global Partnerships is one example how we broaden our client base
Swiss Re Global Partnerships is one example how we broaden our client base and address the protection gap Florida Hurricane risk Turkey Bangladesh Caribbean Flood • First dedicated Hurricane, Earthquake pool Beijing earthquake and insurance Agricultural risk public sector team excess rainfall risk i
Slide 8: Technology will change the insurance industry
Technology will change the insurance industry Christian Mumenthaler CEO Reinsurance Media Conference | Monte Carlo | 14 September 2015 8
Slide 9: As 3D printing technology advances, its global revenues increase strongly
As 3D printing technology advances, its global revenues increase strongly Global revenue from 3D printing Medicine in USD bn 21 Organs 4 0.5 0.7 1 0.2 1994 1999 2004 2009 2014 2020E Data source: Wohler Associates, Inc. 2015 Media Conference | Monte Carlo | 14 September 2015 9
Slide 10: Autonomous cars
Autonomous cars A reality today – just a question of time until they become the norm Knight Rider "Kitt" Still a vision Media Conference | Monte Carlo | 14 September 2015 10 in the 1980’s
Slide 11: Autonomous driving will reduce accident rates and lower insurance premium
Autonomous driving will reduce accident rates and lower insurance premium Projected motor insurance premium for selected markets 1500 Combined premium if no technological 1200 development 900 USD bn 600 Emerging markets 1 300 Advanced markets 2 0 2015 2020 2025 2030 2035 Source: Swiss Re estimates 1
Slide 12: Alternative scenario: more moderate growth of total car park and higher pick-up rate
Alternative scenario: more moderate growth of total car park and higher pick-up rate (sales) of autonomous cars Projected motor insurance premium for selected markets 1500 Combined premium 1200 if no technological development 900 USD bn 600 Emerging markets 1 300 Advanced markets 2 0 2015 2020 2025
Slide 13: Cognitive computing – a game changer
Cognitive computing – a game changer IBM's Watson beat all time champions in "Jeopardy" (2011) Q: His victims include Charity Burbage, Mad Eye Moody & Severus Snape; he'd be easier to catch if you'd just name him! A: Voldemort Q: It's Michelangelo's fresco on the wall of the Sistine Chapel, depictin
Slide 14: Technology will transform our everyday life, including personal finance
Technology will transform our everyday life, including how we deal with personal finance Medical advisor Personal assistant Financial advisor Media Conference | Monte Carlo | 14 September 2015 14
Slide 15: Why new technologies will disrupt the insurance industry
Why new technologies will disrupt the insurance industry • New underwriting models will evolve, using big data (e.g. telematics) and smart analytics • Some products are breaking away (e.g. motor insurance) • Increased risks from system malfunctions and cyber; accumulation risks need to be understood
Slide 16: Drivers of underwriting performance
Drivers of underwriting performance Matthias Weber, Group Chief Underwriting Officer Media Conference | Monte Carlo | 14 September 2015 16
Slide 17: Two drivers of underwriting outperformance
Two drivers of underwriting outperformance R&D provides a competitive advantage; Risk Selection requires economies of scale Having the "right" portfolio mix is as Portfolio Steering important for underwriting outperformance as individual risk selection Media Conference | Monte Carlo | 14 September 2
Slide 18: Getting the 'right' portfolio mix
Getting the ‘right’ portfolio mix Important to • predict loss, exposure and premium trends by portfolio segment • understand how each portfolio segment contributes to relevant financial indicators Property & Life & Health Casualty Specialty Very positive in initial Cash flow Negative in initial year
Slide 19: Key drivers of P&C reinsurance pricing
Key drivers of P&C reinsurance pricing Pricing drivers Impact Comments Low interest rates Improve P&C underwriting discipline Greater recognition of risk mitigating tools under risk- Regulatory changes based and economic solvency frameworks No nat cats with large insured losses have Natural catastro
Slide 20: Secondary market spreads for cat bonds have stabilised
Secondary market spreads for cat bonds have stabilised Average Secondary Market Spreads from January 2014 – July 20151 6.00% 5.50% 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% All USW Non-USW 1 Swiss Re Capital Markets pricing indications only; secondary indication spreads are seasonally adjusted; anal
Slide 21: The industry outlook – trends relevant for underwriting
The industry outlook – trends relevant for underwriting Property Liability • Price levels are expected to • US insurance rates increasing for stabilise some segments, reinsurance rates • Demand for nat cat capacity is under pressure expected to continue to increase • Broad rate increases possible in
Slide 22: Summary and outlook
Summary and outlook Michel M. Liès, Group Chief Executive Officer Media Conference | Monte Carlo | 14 September 2015 22
Slide 23: Societal trends influencing the re/insurance industry
Societal trends influencing the re/insurance industry Hyperconnectivity Dependency on technology Intensified human- technical interface Rising government debt interest rates sustained low Increasing Continued low Alternative currencies Global Mobility desire migration social solidarity pools Fragmen
Slide 24: Trends and challenges
Trends and challenges Low margins Industry in P&C Re consolidation Current Low yield, low Volatility in High growth environment; Growth Markets regulatory changes Evolution of primary Reshuffling of players with rich value chain customer insights Future Impact of technology Media Conference | Monte
Slide 25: Remaining committed to a strong capital position and deploying capital towards profitable growth
Remaining committed to a strong capital position and deploying capital towards profitable growth • Swiss Re is well positioned to face the challenges and opportunities of the sector − Deep underwriting knowledge, portfolio steering and risk selection − Geographic and product diversification to deliv
Slide 26: Media Conference | Monte Carlo | 14 September 2015
Media Conference | Monte Carlo | 14 September 2015 26
Slide 27: 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
Swiss Re — Swiss Re Media Conference, Monte Carlo 2015 on 6ix