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Annual results 2013
• Key achievements Michel M. Liès, Group CEO
• Financial performance George Quinn, Group CFO
• Business and strategy outlook Michel M. Liès, Group CEO
Today’s agenda
2
Annual results 2013
Key achievements
Michel M. Liès, Group CEO
3
Annual results 2013
Priorities for the Group CEO Achievements 2013
4
1 SST 2/2013, as filed with FINMA at the end of October 2013, consolidated Group view based on a projection for mid-2013 to mid-2014. Impact of March 2013 USD 750m and October 2013 CHF 175m subordinated contingent write-off securities not reflected in SST 2/2013 2 Proposed dividends to be paid in the form of Swiss withholding tax exempt distributions from legal reserves from capital contributions; such reserves totalling CHF 5.2bn as at 31 December 2013
• P&C Re: successful renewals, lower but attractive economic rate levels, complemented by net premium growth from expiry of QS
• Corporate Solutions: on track to achieve profitable growth targets
Outperform our peers in P&C
• Continued delivery on our financial targets
• Productivity emphasis to control management expenses
• Organic and transactional expansion into High Growth Markets Group strategy
• L&H Re: USD 1bn capital extraction; profitable new business; management actions to improve returns to 10-12% ROE by 2015
• Admin Re®: strong cash generation and dividends to the Group
Address low returns in L&H
Capital and asset management
• Re-balancing assets to mid-term plan completed; de-leveraging ahead of plan; Group SST ratio 229%1; S&P excess capital over AA level estimated at > USD 10bn per end 2013
• Growing regular dividend2 and business, plus special dividend2
Annual results 2013
• Strong capital position allows Swiss Re to continue to grow the regular dividend…
• …and take advantage of business growth opportunities
• Therefore the BoD will propose to the AGM
− A dividend1 of CHF 3.85 and
− A special dividend1 of CHF 4.15 per share
Swiss Re's dividend policy
• Highest priority is growing our regular dividend with long-term earnings; at a minimum we aim to maintain the regular dividend
• Business growth where it meets our profitability requirements
1 Proposed dividends to be paid in the form of Swiss withholding tax exempt distributions from legal reserves from capital contributions; such reserves totalling CHF 5.2bn as at 31 December 2013
5
Redeploying additional USD 3bn of excess capital @11% ROE by 2015
Capital management Growing regular dividends and profitable business growth remain our priorities
Annual results 2013
6.6 7.7
11.9 13.0
9.7
2010 2011 2012 2013 2014E 2015E
Group financial targets On track
in USD2
ROE 700 bps above risk free average over 5 years (2011-2015)
3
7.3 8.0
3
= reported EPS = EPS @10% avg. annual growth (base: 2010), adjusted
for special dividends1
EPS growth 10% average annual growth rate, adjusted for special dividends1
8.4
1 EPS growth rate has been adjusted from 10% to 5% for 2014 to account for the proposed CHF 4.15 per share special dividend (approx USD 1.6bn) expected to be distributed in April 2014. Methodology is in line with the approach taken for the special dividend of CHF 4.00 per share paid in April 2013.
2 Assumes constant foreign exchange rate 3 Excl. CPCI
Delivering the 2011-2015 financial targets remains Swiss Re's top priority
6
9.2 9.6
13.4 13.7
2010 2011 2012 2013 2014E avg. 2011-2015E
in %
= reported ROE
= 700 bps above US Gov 5 years
8.5 7.8 8.2
+5% +10%
Annual results 2013
Financial performance
George Quinn, Group CFO
7
Annual results 2013
• Group net income USD 4.4bn – Return on equity 13.7%, earnings per share USD 12.97 (CHF 12.04)
– Group combined ratio 85.3%
– Return on investments 3.6%
• Reinsurance net income USD 3.6bn – Strong underwriting performance in P&C continues
– L&H impacted by reserve strengthening for Australian group disability business
• Corporate Solutions with profitable growth, net premiums earned +27.9%
• Admin Re® gross cash generation USD 521m, net income USD 423m
• Book value per common share USD 93.08 (CHF 82.76) – S&P excess capital over AA level estimated at > USD 10bn per end 2013
– Proposed regular dividend1 CHF 3.85
– Proposed additional special dividend1 CHF 4.15
– Proposed dividends1 distribute approx USD 3.1bn of capital to shareholders
8
2013 Financial highlights Excellent Group performance
1 Distributions to be made in the form of Swiss withholding tax exempt distributions out of legal reserves from capital contributions
Annual results 2013
1 Excluding contingent capital instruments (USD 1 102m, of which USD 352m in P&C Re, USD 750m in L&H Re); basis for ROE and BVPS calculations
P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
• Common shareholders' equity1 12 904 5 480 2 771 5 804 4 932 31 850 32 900
of which unrealised gains 459 301 97 680 79 1 616 4 379
• Book value per common share (USD) 93.08 95.87
(CHF) 82.76 87.76
USD m, unless otherwise stated P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
Total FY 2013
Total FY 2012
Total Q4 2013
Total Q4 2012
• Premiums earned and fee income 14 542 10 023 2 922 1 330 1 28 818 25 446 7 766 6 532
• Net income/loss 3 292 356 279 423 94 4 444 4 201 1 206 795
• Return on investments 2.8% 4.1% 2.4% 5.1% 1.7% 3.6% 4.0% 3.8% 3.0%
• Return on equity 26.4% 5.4% 9.6% 6.8% 2.2% 13.7% 13.4% 15.4% 9.7%
• Combined ratio 83.3% - 95.1% - - 85.3% 83.1% 86.6% 90.5%
• Operating margin - 5.2% - - - 5.2% 8.6% -1.1% 8.2%
• Earnings per share (USD) 12.97 11.85 3.52 2.32
(CHF) 12.04 11.13 3.27 2.17
Key figures
9
Annual results 2013
2 990 3 292
12 329 14 542
+17.9%
ROE: 26.4%
83.3%
80.7%
+2.6%pts +10.1%
FY 2012 FY 2013
• Net impact from large nat cats in 2013 was 7.2%pts, 2.9%pts below expected
• 2013 benefited by 7.4%pts from prior year net reserve releases; 2012: 8.1%pts
• Adjusting for expected nat cat and prior year development CR is 93.6%, reflecting large man-made and attritional losses
• Q4 2013 combined ratio 84.0%1; Q4 2012: 88.2%
10
P&C Reinsurance Continued strong underwriting performance
Net income, ROE
USD m, %
Combined ratio
%
Net premiums earned USD m, %
FY 2012 FY 2013
• Net investment result down USD 0.4bn, mainly due to lower gains on private equity investments and the shift of Principal Investments to the Group
• Return on investments 2.8%; 2012: 3.2%
• Exceptionally low tax expense in 2013
FY 2012 FY 2013
• Increase in premiums earned mainly driven by expiry of a quota share retrocession in 2012 and new business written in Americas
• Gross premiums written increased by 7%
1 Q4 2013: 1.7%pts impact from lower than expected nat cats and 8.1%pts from reserve releases. As adjusted combined ratio of 93.8%
Annual results 2013
10 488 11 465
Operating revenues USD m
Net income, ROE USD m, %
Operating margin1
% +9.3% -3.4%pts
5.2%
8.6%
1 Operating margin is calculated as operating income divided by total operating revenues. See appendix slide 36 for calculation details
ROE: 5.4%
-51.8%
FY 2012 FY 2013
• Reserve strengthening in Australian group disability business of USD 369m, of which USD 170m in Q4 2013
• Adverse performance of the YRT business recaptured in Q1 2013 USD 61m
• Higher expenses of USD 113m reflecting growth initiatives
• Operating margin excl. VA/GMDB/B36 is 4.8%
L&H Reinsurance Strong new business growth, reserve strengthening in Australia
739
356
11
FY 2012 FY 2013
• Premiums earned and fee income increased by 9.9%
• Growth driven by pre-2004 US YRT business recaptured in Q1 2013 and new Health business in Europe and Asia, including large transactions
• Increase in running yield to 3.5% as a result of asset re-balancing; 2012: 3.2%
FY 2012 FY 2013
• Net realised gains lower at USD 386m; 2012: USD 709m
• Return on investments 4.1%; 2012: 4.7%
• VA/GMDB/B36 net gain of USD 47m; 2012: USD 83m loss
• Exceptionally low tax expense in 2013
Annual results 2013
196
279
Net income, ROE
USD m, %
Combined ratio
%
2 284
2 922
Net premiums earned USD m, %
Corporate Solutions Continued profitable growth
1 Estimated total financial contribution (TFC) of Corporate Solutions business written within Swiss Re Group, as shown at Investors' Day 2012, incl. development of historical loss reserves remaining in Reinsurance for CR and ROE, as well as related investment income and additional USD 0.5bn shareholders' equity for ROE
95.1%
96.2%
ROE: 9.6%
+27.9% -1.1%pts +42.3%
FY 2012 FY 2013
• Nat cat impact 4.4%pts, 1.8%pts below expected
• Favourable reserve development of USD 62m, benefiting CR by 2.1%pts
• Adjusting for expected nat cat and reserve development CR is 99.0%
• CR on basis of estimated TFC1 to Swiss Re Group 88.3%
12
FY 2012 FY 2013
• Gross premiums written net of intra-group transactions increased to USD 3.6bn, corresponding to a growth rate of 4.5%; underlying growth rate significantly higher due to non-recurring effects in the prior year
• Since the creation of Corporate Solutions in 2010, gross premiums written have increased by a CAGR of 15.3%
FY 2012 FY 2013
• Insurance derivative accounted weather and nat cat business USD 91m; 2012: USD 55m
• Return on investments 2.4%; 2012: 3.2%
• ROE on basis of estimated TFC1 to Swiss Re Group 16.0%
Annual results 2013
183
423
392 521
1 196
4.9% 5.1%
Return on investments
%
Admin Re® Strong gross cash generation, ROI and earnings
Net income, ROE
USD m, % +0.2%pts
1 Gross cash generation (GCG) is the change in excess capital over and above the target capital position
ROE: 6.8%
+131.1% -56.4%
-399
13
804
Gross cash generation1
USD m, %
FY 2012
FY 2013
• USD 357m dividends paid to the Group in 2013
• 2013 GCG of USD 521m includes USD 120m from business transfer to L&H Re
• Prior year included USD 804m cash proceeds and release of capital related to sale of Admin Re® US
FY 2012 FY 2013
• Return on investments of 5.1% primarily driven by net investment income from corporate and government bonds and realised gains from the sale of government bonds
• Net realised gains of USD 283m; 2012: USD 270m
• Running yield on fixed income portfolio 4.2%; 2012: 4.3%
FY 2012 FY 2013
• Net income supported by net realised gains from investments of USD 283m and favorable tax impacts of USD 99m, partially offset by sale adjustments of USD -86m on Admin Re® US
• 2012 include USD 399m loss on sale of Admin Re® US
Annual results 2013
5.4%
-0.1% 4.0% 3.6%
122.8 115.5
Return on investments %
Avg. invested assets1
USD bn, basis for ROI calculation -0.4%pts -5.9%
Group investment result Strong performance
1 2012 includes cash management activity which is excluded from ROI scope in 2013
14
Total return %
-5.5%pts
FY 2012 FY 2013
• Decrease mainly driven by the sale of Admin Re® US and a reduction of unrealised gains
• Re-balancing complete, net purchases of corporate bonds USD 9.1bn and equities USD 2.5bn in 2013
• Short duration position in anticipation of higher interest rates; DV01 of USD -5.6m
FY 2012
FY 2013
• Group ROI of 3.6% for 2013, driven by net investment income on fixed income and realised gains of USD 1.1bn primarily from re-balancing the investment portfolio
• ROI excluding fx of 3.6%; 2012: 4.2%
• Impairments of USD 41m; 2012: USD 162m
FY 2012
FY 2013
• Total return impacted by m-t-m losses from higher interest rates, partially offset by credit spread tightening and a rise in equity markets
• Group fixed income running yield at 3.2% (Q4 2013: 3.3%); 2012: 3.2%
Annual results 2013
23% 10-20%
32% 35-55%
5% 5-10%
28% 20-30%
11% 5-10% 1% 0-5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
EndFY 2013
Mid-termplan
Other (incl. derivatives)Equities and alternatives (incl. Principal Investments)Corporate bonds (incl. loans, municipals and credit ETFs)Securitised productsGovernment bonds (incl. agency)Cash, cash equivalents and short-term investments
15
Investment mix Balanced Group asset allocation
• Re-balancing complete
– Corporate bonds close to upper end of mid-term plan
– Net sales of government bonds USD 14.2bn in 2013 in part driven by the short duration position
– Equities and alternatives slightly above mid-term plan range due to strong market performance and growth in Principal Investments portfolio
• Principal Investments included
– Portfolio part of Equities and alternatives actuals and included in mid-term plan ranges
Annual results 2013
32 900
-2 760 -288
-2 763
4 444 317
31 850
24 000
26 000
28 000
30 000
32 000
34 000
36 000
38 000
40 000
Commonshareholders'
equity31 Dec 2012
Net incomeattributable to
commonshareholders
Dividends Other Foreign currencytranslation
adjustments
Net change inunrealised
gains/losses
Commonshareholders'
equity31 Dec 2013
USD m Gov bonds -3.6 Corp bonds -1.4 Sec products -0.1 Equities and others 1.2 Tax 1.1 Total -2.8
16
Common shareholders' equity 2013 Increase from strong net income more than offset by dividends and reduction in unrealised gains
Annual results 2013
Business and strategy outlook
Michel M. Liès, Group CEO
17
Annual results 2013
• Active cycle management, reflects anticipated market trends for 2014
• Volume2 down 6% to USD 9.2bn
• Decrease in risk adjusted price quality driven by rate and exposure changes, claims inflation, partially offset by higher interest rates
Risk adjusted price quality1
1 Swiss Re's risk adjusted price quality provides an economic view on price quality, ie includes rate and exposure changes, claims inflation and interest rates 2 Gross premium volume, treaty portfolio; estimated outcome vs up for renewal 1 Jan 2014
18
• Property Cat rates softened in most markets, though remain attractive
• Price levels increased in some Motor markets, otherwise flat or slightly softening; identified and wrote attractive new Casualty business in the US
• Despite larger declines in price adequacy, non-proportional business remains significantly more attractive than proportional business
– 34% of P&C Re's 2013 premium earned was non-proportional business
111.5%
Up forrenewal
1 Jan 2014
Estimatedoutcome
111%
107%
-3.6%
P&C Re: January 2014 treaty renewals Overall economic price quality remains attractive
Annual results 2013
117.0
124.0
104.0 98.4 98.4
114.1
90.4 90.2
97.9 93.7
97.4
104.7
83.1 85.3
95.0
108.4
107.8 101.1
98.3 98.2 97.3 93.9
96.8
95.4 92.8 93.1%
0%
1%
2%
3%
4%
5%
60%
70%
80%
90%
100%
110%
120%
130%
5-year US Treasury risk-free rates (RHS) Group combined ratio (LHS) Group combined ratio, 5y moving avg (LHS)2
1 Assuming an average large loss burden and no material impact from prior year development 2 Historical combined ratios as published; 2009 and later based on new org. structure and calculation method, as initially disclosed at Investors' Day 2012
P&C Underwriting Strong and stable underwriting track record
19
• 5 year average combined ratio trend demonstrates Swiss Re's commitment to active cycle management and disciplined underwriting
• 2014 combined ratio estimated1 at 95% for Swiss Re Group, P&C Reinsurance and Corporate Solutions
Annual results 2013
Outlook • 2014 estimated combined ratio 95%1, driven by
continued high quality of the portfolio and declining expense ratio, as premium generated from growth initiatives begins to outpace the investment
• Net reserves and assets building with business growth, supporting higher total investment return and ROE, as well as return of capital to the Group
• 2015: execution of strategy to result in gross premium written net of intra-group transactions of USD 4-5bn at 10-15%2 ROE
2.4 2.5
3.5 3.6 4-5
2010 2011 2012 2013 … 2015E
in USD bn
Corporate Solutions Strategy implementation on track
1 Assuming an average large loss burden and no material impact from prior year development 2 In years with "normal" nat cat experience and current modest investment yields
+6.1% +38.1%
Achievements in 2013 • Profitability
– Quality of portfolio remains at consistently high level
– Notable improvement of claims ratio
• Growth
– Strengthening of local teams in existing offices
– Expansion of distribution channels by obtaining Singapore direct insurance license
• Efficiency
– New US IT platform rolled out, migration to be completed in 2014
20
+4.5%
3 year CAGR: 15.3%
Annual results 2013
Outlook
• 2014-2016E: GCG forecast raised by USD 150m, dividend by USD 200m
• Expect low-to-mid single digit returns on equity in the near term
• Improved optionality for mid term, including possibility for
– Third party capital to enter
– Use of leverage for new business funding
1 196
521
700
150 - 250
~2 550 –
~2 650
GCGgenerated
2012-2013
Revised basecase
2014-2016E
Managementactions
2014-2016E
Aspirational2012-2016E
(incl. mgtactions)
Admin Re® Increased GCG and dividend forecasts
Strategy • Selective growth
– Build and enhance Admin Re® franchise in the UK market
– All transactions must meet Group investment criteria and hurdle rates
• Value extraction
– Actively manage portfolios of assets and blocks of businesses
– Consistently create value through capital and tax synergies
• Operational excellence
– Keep improving the unique and scalable operating platform
– Focus on transformation and management actions (business efficiency, reduce cost)
21
Gross cash generation USD m
≈ USD 300m annual GCG expected on average1
for 2014-2016E 1 413
900
Dividends USD m
Already paid in
2012-13
1 Future GCG will not be linear and may be negative in particular quarters, eg due to new transactions; GCG targets will be updated on an annual basis
Expected in 2014-16E
Annual results 2013
Principal Investments Clear mandate and investment strategy
22
Outlook • Mandate: generate long-term economic value via
investments in insurance-related businesses by leveraging our core competencies:
– The provision of capital to the insurance industry
– A deep understanding of the insurance value chain and insurance risk universe
• Focus of investments: insurance sector
– High Growth Markets
– Special situations (restructuring, acquisition, privatisation or other dislocation situations)
– Critical KPI for investments is underlying book value growth through the cycle
• Subject to mid-term plan asset allocation
– Portfolio to build in line with growth of Group
– Additional investments funded significantly from redeploying portfolio divestments
HGM direct investments in 2013
• 16 Oct: total commitment of USD 425m to FWD
• 18 Nov: 14.9% stake in SulAmérica
• 20 Nov: investment of USD 493m for a 4.9% stake in New China Life
• Investments now better aligned with mandate = insurance- related and more High Growth Markets
• Focus on long- term value creation
Investments by sector Total end FY 2013: USD 2.3bn
HGM Insurance
Developed Market Insurance
Financial Services Funds Non Insurance
40%
26%
13%
21%
Annual results 2013
• Keep growing regular dividends and profitable business
• Redeploy additional USD 3bn of excess capital @11% ROE by 2015
• 2011-15 financial targets remain our top priority
Performance and capital management
• Maintain industry leading underwriting track record
• Productivity emphasis to control management expenses
• Continue to re-direct capital and talent to High Growth Markets Group strategy
• L&H Re: deliver on fixing pre-2004 US issues, grow new business, demonstrate progress towards 2015 ROE target of 10-12%
• Admin Re®: continue operational transformation, selective UK growth to enhance UK franchise
Perform in L&H
Priorities for the Group CEO in 2014 Focus on strategy execution
23
Outperform our peers in P&C
• P&C Re: strict focus on risk selection and portfolio management; differentiate through knowledge, expertise and services
• Corporate Solutions: deliver on our commitment of continuing profitable growth, with particular focus on High Growth Markets
Annual results 2013
Appendix
24
Annual results 2013
Appendix
• Business segment results Q4 2013 – Income statement
• Business segment results 2013 – Income statement
• Business segment results 2013 – Balance sheet
• Shareholders' equity and ROE Q4 2013
• Shareholders' equity and ROE 2013
• Expected nat cat premiums and claims
• P&C Reinsurance and Corporate Solutions – Nat cat and large man-made claims
• P&C Reinsurance – Underwriting performance
• P&C Reinsurance: 2014 January renewals – Portfolio weighting by line of business and region
• L&H Reinsurance – Income break-down
• L&H Reinsurance – operating margin calculation basis
• Corporate Solutions – Underwriting performance
• Net investment income
• Net realised gains/losses
• Net unrealised gains/losses
• Return on investments basis
• Return on investments (ROI)
• Overall investment portfolio
• Government bonds
• Corporate bonds
• Securitised products
• Equities and Alternative Investments
• Sensitivities
• Common shareholders' equity Q4 2013
• Number of shares
• Premiums by country
• Exchange rates
• Corporate calendar & contacts
• Cautionary note on forward-looking statements
25
Annual results 2013
USD m Re-
insurance P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
Consoli-dation
Total Q4 2013
Total Q4 2012
Revenues Premiums earned 6 633 3 887 2 746 832 161 1 - 7 627 6 390 Fee income from policyholders 13 - 13 - 126 - - 139 142 Net investment income/loss – non participating 647 265 382 24 304 35 -6 1 004 1 010 Net realised investment gains/losses – non participating 128
32
96
30
91
54 -
303 54
Net investment result – unit-linked and with-profit 53 - 53 - 808 - - 861 618 Other revenues 17 17 - 1 - 83 -90 11 4 Total revenues 7 491 4 201 3 290 887 1 490 173 -96 9 945 8 218 Expenses Claims and claim adjustment expenses -2 074 -2 074 - -528 - 4 - -2 598 -2 263 Life and health benefits -2 351 - -2 351 - -356 - - -2 707 -2 221 Return credited to policyholders -65 - -65 - -901 - - -966 -776 Acquisition costs -1 273 -758 -515 -122 9 - - -1 386 -1 083 Other expenses -713 -433 -280 -170 -144 -113 82 -1 058 -867 Interest expenses -183 -59 -124 -1 -12 -5 14 -187 -182 Total expenses -6 659 -3 324 -3 335 -821 -1 404 -114 -96 -8 902 -7 392 Income/loss before income tax expenses 832 877 -45 66 86 59 - 1 043 826 Income tax expense/benefit 175 136 39 -13 -1 21 - 182 -13 Net income/loss before attribution of non-controlling interests 1 007
1 013
-6
53
85
80 -
1 225 813
Income attributable to non-controlling interests -
-
-
-1
-
- -
-1 -1 Net income/loss after attribution of non-controlling interests 1 007
1 013
-6
52
85
80 -
1 224 812
Interest on contingent capital instruments -18 -5 -13 - - - - -18 -17 Net income/loss attributable to common shareholders 989
1 008
-19
52
85
80 -
1 206 795
Business segment results Q4 2013 Income statement
26
Annual results 2013
USD m Re-
insurance P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
Consoli-dation
Total FY 2013
Total FY 2012
Revenues Premiums earned 24 509 14 542 9 967 2 922 844 1 - 28 276 24 661 Fee income from policyholders 56 - 56 - 486 - - 542 785 Net investment income/loss – non participating 2 540 1 098 1 442 98 1 180 150 -21 3 947 4 473 Net realised investment gains/losses – non participating 453
184
269
150
201
-38 -
766 947
Net investment result – unit-linked and with-profit 249 - 249 - 3 098 - - 3 347 2 570 Other revenues 61 61 - 2 1 307 -347 24 188 Total revenues 27 868 15 885 11 983 3 172 5 810 420 -368 36 902 33 624 Expenses Claims and claim adjustment expenses - 7 884 -7 884 - -1 773 - 2 - -9 655 -7 763 Life and health benefits -8 075 - -8 075 - -1 506 - - -9 581 -8 878 Return credited to policyholders -286 - -286 - -3 392 - - -3 678 -2 959 Acquisition costs -4 459 -2 761 -1 698 -406 -30 - - -4 895 -4 548 Other expenses -2 418 -1 472 -946 -601 -441 -356 308 -3 508 -3 217 Interest expenses -751 -207 -544 -1 -46 -22 60 -760 -736 Total expenses -23 873 -12 324 -11 549 -2 781 -5 415 -376 368 -32 077 -28 101 Income/loss before income tax expenses 3 995 3 561 434 391 395 44 - 4 825 5 523 Income tax expense/benefit -279 -249 -30 -111 28 50 - -312 -1 125 Net income/loss before attribution of non-controlling interests 3 716
3 312
404
280
423
94 -
4 513 4 398
Income attributable to non-controlling interests -1
-1
-
-1
-
- -
-2 -141 Net income/loss after attribution of non-controlling interests 3 715
3 311
404
279
423
94 -
4 511 4 257
Interest on contingent capital instruments -67 -19 -48 - - - - -67 -56 Net income/loss attributable to common shareholders 3 648
3 292
356
279
423
94 -
4 444 4 201
Business segment results 2013 Income statement
27
Annual results 2013
31 December 2013, USD m Re-
insurance P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
Consoli-dation
End FY 2013
End FY 2012
Assets
Fixed income securities 54 574 24 986 29 588 4 644 20 014 64 - 79 296 88 848 Equity securities 5 350 4 017 1 333 981 - 1 360 - 7 691 3 774 Other investments 13 259 10 080 3 179 169 1 800 5 561 -5 905 14 884 16 044 Short-term investments 17 410 13 297 4 113 1 595 1 474 510 - 20 989 18 645 Investments for unit-linked and with-profit business 988 - 988 - 26 227 - - 27 215 25 501 Cash and cash equivalents 5 454 5 288 166 562 1 748 308 - 8 072 10 837 Deferred acquisition costs 4 436 1 591 2 845 319 1 - - 4 756 4 039 Acquired present value of future profits 1 451 - 1 451 - 2 086 - - 3 537 3 023 Reinsurance recoverable 6 508 4 752 1 756 8 228 323 - -6 732 8 327 10 109 Other reinsurance assets 20 743 11 457 9 286 2 422 3 475 3 -1 967 24 676 24 774 Goodwill 4 092 2 057 2 035 17 - - - 4 109 4 092 Other 12 697 8 938 3 759 988 919 207 -4 843 9 968 11 817 Total assets 146 962 86 463 60 499 19 925 58 067 8 013 -19 447 213 520 221 503
Liabilities Unpaid claims and claim adjustments expenses
55 447 45 578 9 869 11 549 1 205 15 -6 732 61 484 63 670
Liabilities for life and health policy benefits 17 392 - 17 392 232 18 415 - -6 36 033 36 117 Policyholder account balances 1 595 - 1 595 - 29 582 - - 31 177 29 349 Other reinsurance liabilities 13 707 11 591 2 116 4 355 620 6 -2 433 16 255 16 780 Short-term debt 4 528 798 3 730 - 646 1 285 -2 641 3 818 3 612 Long-term debt 15 327 4 700 10 627 - - - -605 14 722 16 286 Other 19 463 10 523 8 940 1 010 1 795 1 775 -6 989 17 054 21 663 Total liabilities 127 459 73 190 54 269 17 146 52 263 3 081 -19 406 180 543 187 477
Shareholders' equity 19 486 13 256 6 230 2 771 5 804 4 932 -41 32 952 34 002 thereof contingent capital instruments 1 102 352 750 - - - - 1 102 1 102
Non-controlling interests 17 17 - 8 - - - 25 24 Total equity 19 503 13 273 6 230 2 779 5 804 4 932 -41 32 977 34 026 Total liabilities and equity 146 962 86 463 60 499 19 925 58 067 8 013 -19 447 213 520 221 503
Business segment results 2013 Balance sheet
28
Annual results 2013
1 Total is after consolidation 2 Based on published net income attributable to common shareholders
USD m Re-
insurance P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
Total1
Q4 2013 Common shareholders' equity at 30 September 2013 17 241 11 711 5 530 2 691 6 067 4 862 30 818
Net income attributable to common shareholders 989 1 008 -19 52 85 80 1 206 Dividends - - - - - - - Other (incl. fx) 180 141 39 -6 -81 -19 76 Net change in unrealised gains/losses -26 44 -70 34 -267 9 -250 Common shareholders' equity at 31 December 2013 18 384 12 904 5 480 2 771 5 804 4 932 31 850 Contingent capital instruments 1 102 352 750 - - - 1 102 Shareholders' equity at 31 December 2013 19 486 13 256 6 230 2 771 5 804 4 932 32 952 Non-controlling interests 17 17 - 8 - - 25 Total equity at 31 December 2013 19 503 13 273 6 230 2 779 5 804 4 932 32 977
ROE calculation USD m
Re-
insurance
P&C Re L&H Re Corporate Solutions
Admin
Re® Group items
Total1 Q4 2013
Net income/loss attributable to common shareholders 989 1 008 -19 52 85 80 1 206 Opening common shareholders' equity 17 241 11 711 5 530 2 691 6 067 4 862 30 818 Average common shareholders' equity 17 813 12 308 5 505 2 731 5 936 4 897 31 334 ROE, annualised2 22.2% 32.8% -1.4% 7.6% 5.7% 6.5% 15.4%
Shareholders' equity and ROE Q4 2013
29
Annual results 2013
USD m Re-
insurance P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
Total1
FY 2013 Common shareholders' equity at 31 December 2012 19 593 12 004 7 589 3 032 6 662 3 660 32 900
Net income attributable to common shareholders 3 648 3 292 356 279 423 94 4 444 Dividends -1 932 -966 -966 -489 -357 18 -2 760 Dividend-in-kind (shift of Principal Investments) -1 205 -1 205 - - - 1 205 - Other (incl. fx) 168 253 -85 -34 -65 -46 29 Net change in unrealised gains/losses -1 888 -474 -1 414 -17 -859 1 -2 763 Common shareholders' equity at 31 December 2013 18 384 12 904 5 480 2 771 5 804 4 932 31 850 Contingent capital instruments 1 102 352 750 - - - 1 102 Shareholders' equity at 31 December 2013 19 486 13 256 6 230 2 771 5 804 4 932 32 952 Non-controlling interests 17 17 - 8 - - 25 Total equity at 31 December 2013 19 503 13 273 6 230 2 779 5 804 4 932 32 977
ROE calculation USD m
Re-
insurance
P&C Re L&H Re Corporate Solutions
Admin
Re® Group items
Total1 FY 2013
Total1 FY 2012
Net income/loss attributable to common shareholders 3 648 3 292 356 279 423 94 4 444 4 201 Opening common shareholders' equity 19 593 12 004 7 589 3 032 6 662 3 660 32 900 29 590 Average common shareholders' equity 18 989 12 454 6 535 2 902 6 233 4 296 32 375 31 245 ROE2 19.2% 26.4% 5.4% 9.6% 6.8% 2.2% 13.7% 13.4%
Shareholders' equity and ROE 2013
30
1 Total is after consolidation 2 Based on published net income attributable to common shareholders
Annual results 2013
1 Only events exceeding USD 20m included, net premiums after acquisition costs
Nat cat premiums and claims1
P&C Re Corporate Solutions USD m
FY 2013
Expected net premiums 3 090
2 750 340
Expected net claims 1 660 1 475 185
Actual net nat cat claims 1 177 1 049 128
USD m Est.
FY 2014 P&C Re Corporate Solutions
Expected net premiums 2 860 2 500 360
Expected net claims 1 640 1 430 210
Expected nat cat premiums and claims
31
Annual results 2013
1 Only events exceeding USD 20m included, net premiums after acquisition costs
P&C Reinsurance and Corporate Solutions Nat cat and large man-made claims
32
Nat cat1 FY 2013 Total est.
net claims Q4 2013
net change P&C Re Corporate Solutions
Hurricane Sandy October 2012 769 -60 -60 -
Floods in Central Europe May/June 291 -9 - -9 Floods in Calgary June 177 - - -
Flash floods Toronto July 63 - - - Hail storms, Germany September 267 27 27 - Hurricanes Ingrid & Manuel, Mexico September 76 1 1 -
Typhoon Fitow October 58 58 58 - Winterstorm Christian, Europe October 78 78 74 4 Typhoon Haiyan November 80 80 78 2 Winterstorm Xaver, Europe December 53 53 53 -
Man-made1 Satellite loss February 32 - - -
Landslide loss, Utah April 77 - - - Fertilizer plant explosion, Texas April 28 - - -
Fire at petrochemical plant, USA June 31 - - - Marine loss MOL Comfort, Japan July 55 - - - Fire at sugar factory, Saudi Arabia July 33 - - - European casualty loss July 21 21 - 21 Fire at chip plant, China September 84 14 7 7
Water damage at power station, Russia September 58 58 58 -
Annual results 2013
Combined ratios in %, premiums and underwriting result in USD m
FY 2012 FY 2013 Main drivers of change
Net premiums
earned Underwriting
result CR
Q4 2013 Property 74.2% 71.8% • Lower than expected nat cat losses,
prior accident year reserve releases 6 945 1 956 72.2%
Casualty Liability Motor Accident (A&H)
94.0% 54.6%
108.5%
113.7%
101.9% 90.8%
109.9%
94.5%
• Large net reserve releases in 2012
• Hailstorms in Germany and less prior
year reserve releases • Prior accident year reserve releases
5 366 1 850
3 009
507
-100 171
-299
28
96.5% 89.7%
111.6%
23.7%
Specialty Marine
Engineering Credit Other Specialty (Aviation, etc)
68.0% 84.7%
69.8%
70.9%
31.6%
74.5% 87.1%
68.3%
89.7%
36.7%
• Various larger claims and lower prior
year reserve releases • Overall improved result partially offset
by large man-made loss in Russia • Less favourable claims experience
• Benign claims experience in both
periods
2 231 757
681
466
327
569 98
216
48
207
89.3% 83.2%
98.9%
96.9%
72.3%
Total 80.7% 83.3% 14 542 2 425 84.0%
P&C Reinsurance Underwriting performance
33
Annual results 2013
Gross premium volume, treaty portfolio
34
P&C Reinsurance: 2014 January renewals Portfolio weighting by line of business and region
Estimated outcome
44%
23%
18%
15% CasualtyNat CatPropertySpecialty
48%
24%
28% EMEA
Americas
Asia
1 1
Up for renewal 1 Jan 2014
36%
25%
22%
17%
48%
26%
26%
By line of business
By region
1 Excluding nat cat
• Continue to allocate capital to lines with the most favourable risk adjusted returns
• Casualty book is growing in all three regions
Annual results 2013
L&H Reinsurance Income break-down
1 Net realised gains excludes realised gains related to reinsurance transactions (VA, pre-2000 GMDB, B36, etc) 2 Excluding impacts from pre-2004 US business. Includes Australian group disability business strengthening of Q2 2013: USD -82m, Q3 2013: USD -121m;
Q4 2013: USD 170m. Full year 2013 fx adjusted: USD 369m 3 Investors' Day 2013, includes underwriting income, investment income and expenses
USD m Q1
2012 Q2
2012 Q3
2012 Q4
2012 FY
2012 Q1
2013 Q2
2013 Q3
2013 Q4
2013 FY
2013
Net income of which approximately: 209 248 187 95 739 222 141 12 -19 356
Net realised gains1 118 280 288 23 709 111 133 30 112 386
VA, pre-2000 GMDB, impact from B36 -19 -15 -8 -41 -83 91 -49 22 -17 47
Mortality and morbidity compared to expectations2 123 7 -2 47 175 47 50 -142 -214 -259
Changes in models and assumptions -7 -22 -33 -9 -71 6 -18 -38 -24 -74
Pre-2004 Post Level Term (as presented at Investors' Day3) -112 -24 -31 6 - -49
Yearly Renewable Term business (recaptured in Q1 2013) - 75 -104 -20 -12 -61
• VA/GMDB/B36: Full year 2013 is favourable mainly due to B36 gains from increase in risk free rates, partially offset by VA which had negative results from updated mortality assumptions
• Mortality and morbidity experience in 2013 was unfavourable due to the reserve strengthening in Australian group disability business; excluding this, mortality and morbidity experience was favourable
• 2013 PLT impact of USD -49m lower than in 2012 (USD -112m); 2013 YRT impact USD -61m
35
Annual results 2013
USD m Total
FY 2013 Total
FY 2012 Revenues
Premiums earned 9 967 9 050 Fee income from policyholders 56 72 Net investment income/loss – non participating 1 442 1 365 Net realised gains/losses – insurance related derivatives1 -117 -147 Other revenues - 1 Total operating revenues 11 348 10 341 Expenses Life and health benefits -8 075 -6 787 Return credited to policyholders, net of investment return for unit linked and with profit products2 -37 -49 Acquisition costs -1 698 -1 787 Other expenses -946 -833 Total operating expenses -10 756 -9 456 Operating income 592 885 Operating margin 5.2% 8.6%
L&H Reinsurance operating margin Calculation basis
36
In %3 FY
2010 FY
2011 Q1
2012 Q2
2012 Q3
2012 Q4
2012 FY
2012 Q1
2013 Q2
2013 Q3
2013 Q4
2013 FY
2013
Operating margin 14.2 11.8 12.8 8.6 4.8 8.2 8.6 13.6 4.9 4.6 -1.1 5.2
1 As per the Life and Health Reinsurance business segment note to the financial statements 2 The sum of two income statement line items: "Net investment result – unit-linked and with-profits" and "Return credited to policyholders" 3 Operating margin for FY 2010 and FY 2011 are proforma as these periods pre-date the current segment structure
USD m Total
FY 2013 Total
FY 2012 Operating revenues reconciliation Total segment revenues 11 983 11 272 Less net investment result – unit-linked and with-profits -249 -222 Less net realised gains/losses – non-participating and excluding insurance-related derivatives1 -386 -709
Total operating revenues 11 348 10 341
Annual results 2013
Corporate Solutions Underwriting performance
Combined ratios in %, premiums and underwriting result in USD m
FY 2012 FY 2013 Main drivers of change
Net premiums
earned Underwriting
result CR
Q4 2013 Property 100.7% 89.3% • 2013 benign nat cat experience; 2012
negatively impacted by Hurricane Sandy 1 117 120
76.6%
Casualty
91.7% 108.4% • 2013 impacted by large European casualty loss and unfavourable prior year development
918 -77 113.3%
Specialty Credit Other Specialty
96.2% 82.8%
102.0%
88.8% 74.5% 95.3%
• Continued strong performance in 2013 • Favourable prior year development in
2013; both periods were impacted by satellite losses
887 274 613
99 70 29
111.3% 80.3%
124.4%
Total 96.2% 95.1% 2 922 142 98.6%
37
Annual results 2013
Net investment income
1 Income from assets backing with-profit and unit-linked business are credited to policyholders' accounts and are excluded from investment income available to shareholders
USD m P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
Consoli-dation
Total FY 2013
Total FY 2012
Total Q4 2013
Investment related income 946 1 103 111 889 150 -21 3 178 3 610 813
Government bonds 374 534 41 268 - - 1 217 1 583 281 Corporate bonds 168 393 47 535 - - 1 143 1 135 318 Securitised products 74 103 14 40 14 - 245 312 61
Short-term investments 53 45 5 5 1 - 109 101 28 Equities 82 23 18 - 18 - 141 85 44 Real estate, PE, HF 325 72 9 - 163 - 569 642 159 Investment expenses -220 -84 -26 -40 -72 46 -396 -450 -116 Other 90 17 3 81 26 -67 150 202 38
Insurance related income 152 339 -13 291 - - 769 863 191 Policy loans - 3 - 11 - - 14 215 4 Deposit interest and fee income 136 329 -16 277 - - 726 568 182 Other 16 7 3 3 - - 29 80 5
Non-participating investment income 1 098 1 442 98 1 180 150 -21 3 947 4 473 1 004 Income from with-profit business1 - - - 136 - - 136 153 35 Income from unit-linked business1 - 39 - 614 - - 653 677 149 Total net investment income 1 098 1 481 98 1 930 150 -21 4 736 5 303 1 188
• 2013 fixed income running yield of 3.2%, which is consistent with 2012 of 3.2% as the negative impact from the sale of higher yielding assets in Admin Re® US in 2012 was offset by the impact of m-t-m losses and re-balancing activities in 2013
• Decrease in government bond income primarily due to net sales related to the re-balancing of the investment portfolio and the establishment of a short duration position as well as the sale of Admin Re® US business in 2012
• Increase in income from equities primarily due to net purchases related to re-balancing of the investment portfolio
• Decrease in real estate, PE, HF mainly due to private equity minority interest income of USD 133m in 2012 related to management of Private Equity Partners, which was sold in Q3 2012
38
Annual results 2013
USD m P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
Consoli-dation
Total FY 2013
Total FY 2012
Total Q4 2013
Investment related 380 386 59 283 -36 - 1 072 1 532 314
Government bonds 175 -23 -2 268 - - 418 1 890 33 Corporate bonds 46 -12 18 12 16 - 80 131 23 Securitised products - 10 - -1 - - 9 -114 4 Equities 167 12 80 - 43 - 302 135 74 Real Estate, PE, HF 147 - -4 - 29 - 172 -11 -13 Foreign exchange remeasurement and designated trading portfolios1 -140 161 -33 3 -3 - -12 -212 164
Other asset classes -15 238 - 1 -121 - 103 -287 29 Insurance related -196 -117 91 -82 -2 - -306 -585 -11 Non-participating realised gains and losses 184 269 150 201 -38 - 766 947 303 Net gains/losses from with-profit business2 - - - -21 - - -21 145 -8 Net gains/losses from unit-linked business2 - 210 - 2 369 - - 2 579 1 595 685 Total net realised gains and losses 184 479 150 2 549 -38 - 3 324 2 687 980
Net realised gains/losses
1 The designated trading portfolios are foreign currency denominated trading fixed income securities which back certain foreign currency denominated liabilities 2 Income from assets backing with-profit and unit-linked business are credited to policyholders' accounts and are excluded from investment income available to
shareholders
• Investment related net realised gains primarily driven by re-balancing of the investment portfolio, active management of the listed equity portfolio and the sale of real estate
• Lower net realised gains from the sale of government bonds as compared to 2012
• Other asset classes includes gains related to re-purchase of external debt and m-t-m gains on hedge positions
• Unit-linked business related net realised gains primarily from m-t-m gains on equities as markets increased
• Insurance related net realised losses include write-down of own-used property in P&C Re; 2012 includes the sale of Admin Re® US
39
Annual results 2013
USD m P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
End FY 2013
End FY 2012
Government bonds -76 31 -32 338 - 261 3 816 Corporate bonds 33 151 -2 763 - 945 2 305 Securitised products 36 112 7 51 - 206 259 Equities 630 70 175 1 90 966 313 Other 236 14 -1 19 11 279 262 Total on-balance sheet 859 378 147 1 172 101 2 657 6 955
Real estate 1 726 - - - - 1 726 1 759
Total off-balance sheet 1 726 - - - - 1 726 1 759
Total net unrealised gains/losses 2 585 378 147 1 172 101 4 383 8 714
Net unrealised gains/losses
• Decrease in unrealised gains on government bonds mainly due to higher interest rates in 2013
• Decrease in unrealised gains on corporate bonds primarily from higher interest rates, partially offset by tighter credit spreads during the year
• Decrease in unrealised gains on securitised products mainly from CMBS positions as interest rates have increased
• Increase in unrealised gains on equities as a result of rising equity markets in 2013
40
Annual results 2013
USD bn End
FY 2013 End
FY 2012
Total investment portfolio 158.2 163.7 Unit-linked investments With-profit business
-24.6 -3.5
-22.7 -3.6
Total (excl. unit-linked and with-profit) 130.1 137.4 Cash and cash equivalents Policy loans Other – insurance related Financial liabilities and other1
-7.2 -0.3 1.0
-6.1
-10.0 -0.3 -1.3 -4.6
Total 117.5 121.2
Investments included in the ROI calculation
1 Includes securities in transit, repurchase agreements, securities lending and other assets backing insurance
Return on investments basis
41
Annual results 2013
Return on investments (ROI)
USD m P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
Consoli-dation
Total FY 2013
Total FY 2012
Total Q4 2013
Net investment income 946 1 103 111 889 150 -21 3 178 3 610 813 Net realised gains/losses (incl. fx) 380 386 59 283 -36 - 1 072 1 532 314 Other revenue 40 - - -1 - -39 - 19 - Investment operating income 1 366 1 489 170 1 171 114 -60 4 250 5 161 1 127 Less minority interest income - - - - - - - -133 - Less income from cash/interest income -23 -12 -3 -1 - 1 -38 -70 -10
Less income from securities lending/repurchase agreements -41 - - - - -6 -47 - -10
Basis for ROI 1 302 1 477 167 1 170 114 -65 4 165 4 958 1 107 Average investment assets at avg. fx rates1
46 316 35 732 6 846 22 932 6 631 -3 005 115 452 122 782 116 841
ROI, annualised 2.8% 4.1% 2.4% 5.1% 1.7% n/a 3.6% 4.0% 3.8%
1 Average assets calculation based on monthly average; 2012 includes cash management activity which is excluded from ROI scope in 2013
42
Annual results 2013
USD bn End
FY 2013
Balance sheet values 158.2
Unit-linked investments -24.6
With-profit business -3.5 Assets for own account (on balance sheet only) 130.1
1 Comprised of listed equities, hedge funds – equities, private equity and includes Principal Investments 2 Includes cat bonds and loans 3 Includes alternative investments such as hedge funds – non equities and real estate, derivatives and other investments
USD bn P&C Re L&H Re Corporate Solutions
Admin Re®
Group items
Consoli-dation
End FY 2013
End FY 2012
Cash and cash equivalents 5.3 0.1 0.6 0.9 0.3 - 7.2 10.0 Short-term investments 13.3 4.1 1.6 1.5 0.5 - 21.0 18.6 Government bonds 15.8 15.7 2.4 7.1 - - 41.0 58.0 Corporate bonds 6.5 11.2 1.7 12.2 - - 31.6 23.8 Securitised products2 2.7 2.7 0.5 0.7 0.1 - 6.7 7.0 Equities1 6.0 1.7 1.0 - 2.1 - 10.8 6.4 Mortgages and other loans 1.3 1.2 - 1.4 2.0 -3.3 2.6 2.0 Policy loans - 0.1 - 0.2 - - 0.3 0.3 Other – investment related3 6.7 1.4 0.1 - 2.4 -0.7 9.9 10.0 Other – insurance related - 0.2 0.1 0.2 0.4 -1.9 -1.0 1.3 Total 57.6 38.4 8.0 24.2 7.8 -5.9 130.1 137.4
43
Cash and cash
equivalents 6% Short-term
investments 16%
Government bonds incl.
Agency 32%
Corporate bonds 24%
Securitised products
5%
Equities1 8%
Mortgages and other
loans 2%
Other 7%
Overall investment portfolio 54% invested in cash, short-term investments or government bonds
Annual results 2013
Government bonds High quality portfolio
• Government bonds valued at 99.6% of par2
• Decrease from 2012 mainly due to net sales of USD 14.2bn to accommodate re-balancing and m-t-m losses of USD 3.6bn
USD m S&P rating
31 Dec 20131 End
FY 2013 % of Total
United States AA+ 11 280 27.5%
United Kingdom AAA 11 248 27.4%
Canada AAA 3 312 8.1%
China AA- 962 2.3%
Australia AAA 761 1.9%
Japan AA- 740 1.8%
Switzerland AAA 643 1.6%
RoW and other AAA-NR 2 461 6.0%
Non-Eurozone market value 31 407 76.6%
Germany AAA 4 445 10.8%
France AA 2 846 6.9%
Netherlands AA+ 1 187 2.9%
Eurozone other AAA-BB 1 144 2.8%
Eurozone market value 9 622 23.4%
Total market value 41 029 100%
1 Represents S&P's local currency long term debt rating for the respective countries 2 Excluding interest only positions
Austria 38%
EIB (European Investment
Bank) 26%
EEC/EU super-
sovereign 8%
Finland 21%
Other 7%
Eurozone other: USD 1 144m
44
Other includes European peripheral exposure of USD 21m:
Portugal BB USD 21m Italy nil Spain nil Greece nil Ireland nil
Annual results 2013
USD m End
FY 2013 % of
Total
Resources 3 494 11.1%
Basic industries 1 614 5.1%
Cyclical consumer goods 899 2.8%
Cyclical services 3 260 10.3%
Energy, utilities & mining 3 247 10.3%
Financials 12 429 39.4%
General industries 1 060 3.4%
Information technologies 469 1.5%
Non-cyclical consumer goods 2 770 8.8%
Non-cyclical services 2 312 7.3%
Total¹ 31 554 100%
End FY 2013
Pfandbriefe / covered bonds
14%
Banks 51%
Specialty 15%
Insurance 13%
Real Estate, other 7% Total 100%
Continued re-balancing into corporate bonds with net purchases of USD 9.1bn in 2013
1 Includes Pfandbriefe/covered bonds; excludes credit ETFs
Corporate bonds Re-balancing complete
45
55%
13% 7%
5%
6%
3%
3%
2% 6% United States
United Kingdom
Netherlands
Australia
Canada
Switzerland
Sweden
France
Other
48%
34%
7%
6% 5%
BBB
A
AA
AAA
<BBB
Annual results 2013
45%
14%
38%
3%
Securitised products 54% AAA rated, 88% investment grade
1 Includes invested assets and off balance sheet investment exposures, excludes cat bonds and loans
USD m End
FY 2012 End
FY 2013 Aaa Aa A BBB BB and below
Est. % par
CMBS 3 175 2 908 1 449 280 438 242 499 102%
RMBS 990 915 236 27 358 103 191 86%
Other ABS 2 408 2 453 1 749 300 196 143 65 101%
Other Securitised 100 199 59 82 30 - 28 65%
Total1 6 673 6 475 3 493 689 1 022 488 783 98% Total: USD 6.5bn (98% par)
Decrease of USD 198m mainly due to net sales and maturities in CMBS during the year
46
Annual results 2013
67%
18%
15%
Real Estate by geography
Switzerland
Indirect Real Estate
Germany
Equities and Alternative investments Active management
USD m End
FY 2012 End
FY 2013
Listed Equities1 2 626 6 248
Private Equity1 1 793 1 808
Hedge Funds - equities 546 458
Principal Investments2 1 421 2 278
Total market value 6 386 10 792
USD m End
FY 2012 End
FY 2013
Hedge Funds – non equities 934 919
Real Estate 3 204 3 121
Total market value 4 138 4 040
Equities
Alternative investments
• Increase in listed equities includes re-balancing with net purchases of USD 2.5bn in 2013
• 46% of hedge funds and 58% of private equity investments are equity accounted; mark-to-market recorded through net investment income
47
48%
12%
10%
9%
6%
4% 4%
3% 1% 2% 1%
Listed Equities by sector
Exchange-traded funds
Non-Cyclical Consumer Goods
Financials
Information Technology
Cyclical Services
General Industrials
Resources
Non-Cyclical Services
Basic Industries
Cyclical Consumer Goods
Utilities
1 Excludes Principal Investments 2 Principal Investments consists of listed equities (USD 826m) and Private Equity (USD 1 452m)
Annual results 2013
USD m, pre-tax Scenario
Estimated impact on shareholders’
equity
Estimated impact on economic net worth
(EVM)
Listed equity investments Fall in market values of 25% -1 769 -1 769
Private equity investments Fall in market values of 25% -815 -815
Hedge fund investments Fall in market values of 25% -344 -344
Government bonds Rise in interest rates of 100 bps -3 586 +368
Corporate bonds
Increase in spreads of 100 bps -2 198 -2 240
Rise in interest rates of 100 bps -2 138 +220
Securitised products
Increase in spreads of 100 bps -234 -234
Rise in interest rates of 100 bps -157 +16
Sensitivities
Note: all sensitivities are assumed to take effect on 31 December 2013 and no management actions are included in this analysis. Results are estimated as mutually exclusive events and reflect the estimated impact on the Group of given economic outcomes. All figures are net of hedging impacts (excluding minor equity hedges).
48
Annual results 2013
30 818
-160 -250 1 206
236
31 850
24 000
26 000
28 000
30 000
32 000
34 000
Commonshareholders'
equity30 Sep 2013
Net incomeattributable to
commonshareholders
Other Foreign currencytranslation
adjustments
Net change inunrealised
gains/losses
Commonshareholders'
equity31 Dec 2013
USD m
Common shareholders' equity Q4 2013
49
Gov bonds -0.7 Corp bonds -0.1 Sec products 0.0 Equities and others 0.4 Tax 0.1 Total -0.3
Annual results 2013
Number of shares
1 Shares outstanding is the number of shares eligible for dividends and is used for the BVPS and EPS calculation
in millions FY 2013
Total shares 370.7
of which Treasury shares and shares reserved for corporate purposes 28.5
Shares outstanding1 (as at 31 December 2013) 342.2
Shares outstanding1 (weighted average) 342.8
50
Annual results 2013
Premiums by country
USD m Life&Health Non-Life Total
FY 2013 USA
4 984 6 338 11 322 UK 2 679 991 3 670 China 98 2 569 2 667 Australia 1 177 928 2 105 France 160 1 571 1 731 Canada 916 547 1 463 Germany 205 1 215 1 420 Japan 213 780 993 Ireland 757 56 813 Italy 181 383 564 Netherlands 202 292 494 Switzerland 93 389 482 Republic of Korea 61 324 385 Spain 29 346 375 Bermuda 13 322 335 South Africa 123 167 290 Israel 159 127 286 India 44 200 244 Mexico 28 203 231 Other 684 2 922 3 606 Total 12 806 20 670 33 476
1 Country split based on the country where the premium was generated or an approximation thereof
2013 Gross premiums written and fees assessed against policyholders by country1
51
Annual results 2013
Closing rates CHF/USD EUR/USD GBP/USD
FY 2012 1.09 1.32 1.63
Q3 2013 1.11 1.35 1.62
FY 2013 1.12 1.38 1.66
Change FY 2012/FY 2013 2.75% 4.55% 1.84%
Change Q3 2013/FY 2013 0.90% 2.22% 2.47%
Average rates CHF/USD EUR/USD GBP/USD
FY 2012 1.06 1.28 1.58
Q3 2013 1.07 1.31 1.54
FY 2013 1.08 1.33 1.56 Change FY 2012/FY 2013 1.89% 3.91% -1.27%
Change Q3 2013/FY 2013 0.93% 1.53% 1.30%
Exchange rates
52
USD 43%
EUR 18%
GBP 8%
CNY 8%
AUD 6%
CAD 4% Other 13%
Gross premiums written FY 2013 split by main currencies
Annual results 2013
Investor Relations contacts Hotline E-mail +41 43 285 4444 [email protected] Eric Schuh Ross Walker Chris Menth +41 43 285 4708 +41 43 285 2243 +41 43 285 3878
Simone Lieberherr Simone Fessler +41 43 285 4190 +41 43 285 7299
Corporate calendar & contacts
Corporate calendar 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 Quarter 2014 results Conference call 3 July 2014 Investors' Day London 6 August 2014 Second Quarter 2014 results Conference call 7 November 2014 Third Quarter 2014 results Conference call
53
Annual results 2013 54
Annual results 2013
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 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, liquidity position or prospects to be materially different from any future results of operations, financial condition, solvency ratios, liquidity position 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.
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