exane bnp paribas 15 th european ceo seminar: will the

Exane BNP Paribas 15th European CEO Seminar: "Will the changing face of Europe offer promising opportunities? " Michel M. Liès, Group CEO

Paris, 14 June 2013

15th European CEO Seminar | Exane BNP Paribas | Paris, 14 June 2013

shrinking client loyalty

2

low interest rates, inflation, price

pressure

mature markets, high growth markets

changing risk landscape

weak growth

financial markets, sovereign debt

regulatory environment

Insurance Industry interest rates



weak growth

financial markets, sovereign debt,


low interest rates, inflation, price

pressure

Insurance Industry

A challenging environment, and not just for (re)insurers

weak growth

Insurance Industry



financial markets, sovereign debt


low interest rates, inflation, price pressure


July 1997 Asian financial crisis

2008 Economic and financial crisis

1990s U.S. Savings and Loan crisis

1980s U.S. Savings and Loan crisis

2000 Dot.com bubble

3

* German discount rate until 31 December1998 and ECB Refinancing Rate from that date onwards Source: Datastream data as of 15 November 2012

0

5

10

15

20

25

Central Banks Policy Rates (in %)

US Federal Fund Target Policy Rate Bank of England Policy Rate European Policy Rate Index (Composite*)

Historically low interest-rate environment

15th European CEO Seminar | Exane BNP Paribas | Paris, 14 June 2013 4

Source: Swiss Re Economic Research & Consulting

Slow economic growth

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E

Advanced economies Emerging markets World

Real GDP growth


United States NAIC solvency modernization Federal Insurance Office (FIO) Systemic risk regulation (FSOC) CDS regulation & clearing houses Financial tax initiatives Compensation regulation SEC roadmap to IFRS Rating agencies regulation

Europe Solvency II implementing measures New supervisory architecture (ESAs, ESRB) CRD IV for banks Banking Union Financial transaction taxes Insurance guarantee schemes Crisis management and resolution Rating agencies regulation Revisiting securitisation Hedge Funds regulation

International Financial Stability Board (FSB) agenda BCBS and Basel III IAIS on group supervision (ComFrame) G-SIFI policy measures IMF tax levies IASB & FASB project

Our industry now faces a mosaic of rules and regulations…

Latin America Brazil and Argentina restrictions

Asia Pacific Solvency reforms Investment rules Market access

Presenter

Presentation Notes


Swiss Re is broadly diversified by geography and product line

Net premiums earned1 2012 (USD 25.5 bn) by region (in USD bn) … and by business segment:

Swiss Re benefits from geographic and business mix diversification and has the ability to reallocate capital to achieve profitable growth

Europe Asia Americas (incl. Middle East /Africa)

38% 42% 20%

P&C Re 49%

L&H Re 35%

Corporate Solutions

8%

Admin Re® 8%

1 Includes fee income from policyholders

6

9.6 10.7

5.2


Swiss Re's Group strategy

Current position

The leading player in the wholesale re/insurance industry

Strategic goal: Outperform our peers ▪ Reinsurance ▪ Admin Re® ▪ Asset Management

Smart expansion

▪ Corporate Solutions ▪ Longevity & Health ▪ High Growth Markets

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Swiss Re Group Overview

Reinsurance

To be a focused, lean, global player in large commercial business

To be a recognised force in the closed life book market

To be the world's leading reinsurer

The foundation of our strengths

A key opportunity for growth

Providing cash dividends

Corporate Solutions

Swiss Re Group

Admin Re®

Current position

Strategic goal

Current position

Strategic goal

Current position

Strategic goal

P&C L&H

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Life & Health Unparalleled mortality experience data

provides ability to better quantify the underlying risk

Casualty Forward-looking "Nat-Cat-like" model

being developed, based on systematic assessment of risk drivers

Property Own research team and models for

storm, earthquake and flood Ability to compare to commercial tools

and understand differences

Cornerstones of Swiss Re's underwriting R&D as a key differentiator

Reinsurance is a knowledge business

R&D provides a competitive advantage

Portfolio steering

R&D is a value driver in underwriting

Structuring

skills

Risk selection

Portfolio steering

Cycle management

R&D

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Swiss Re's approach to underwriting leads to outperformance … and growth at the right time

Underwriting profit = GAAP premiums earned - claims and claims adjustment expenses - acquisition costs - other expenses Top 8 reinsurers include: Swiss Re, Munich Re, Hannover Re, PartnerRe, SCOR, General Re, Everest Re, Transatlantic Re Source: Swiss Re Economic Research and Consulting

Swiss Re’s P&C premium and underwriting profit share vs top 8 reinsurers

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Swiss Re's underwriting outperformance in P&C

- 2006-2010: above average share in underwriting profits

- 2011: significantly below average share of underwriting loss

- 2012 volume and prices up

2006 – 2012 SR premium share of 23% SR U/W profit share of 38% SR U/W loss share of 9%

0%

10%

20%

30%

40%

50%

60%

2006 2007 2008 2009 2010 2011 2012Premiums U/W profit (red = loss)


YTD 2013 renewals (January – April)

Treaty portfolio

100% 110%

Up for renewalYTD 2013

Estimatedoutcome

USD 11.0bn USD 10.0bn

January 2013 renewals

January treaty portfolio1

100% 105%

Up for renewal1 April 2013

Estimatedoutcome

April 2013 renewals April treaty portfolio

April renewal prices 3% lower on a risk adjusted basis2 but remained strong

High growth markets grew by 18%, mainly in Africa, CEE and Emerging Asia

Measured move into Casualty and other strategic initiatives showing profitable growth

100% 111%

Up for renewal1 Jan 2013

Estimatedoutcome

USD 1.5bn USD 1.6bn

USD 8.5bn USD 9.4bn

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1 January 2013 numbers have been restated with current fx rates 2 Swiss Re's risk adjusted price quality provides an economic view on price quality, i.e. includes rate and exposure changes, claims inflation and interest rates

P&C Reinsurance April 2013 renewals with moderate growth, high price quality maintained


Low interest rates

Drivers of re-/ insurance prices

Regulatory changes Continuous reserve releases

Industry capitalisation

Factors leading to higher prices

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Factors leading to lower prices

Low inflation Nat Cats

Factors driving P&C re-/insurance prices

High Low

Prices


Swiss Re is well positioned

1 CHF 5bn stop-loss protection on Swiss Re's P&C reserves with Berkshire Hathaway 2 SST 1/2013, as filed with FINMA at the end of April, based on a projection for 2013

13

Lean casualty book L&H: focus on wholesale/reinsurance, avoiding primary business with

guarantees Prudent, ALM-matched asset portfolio with room for moderate re-risking

Low interest rates

SST has given us 5 years practical experience in implementing regulatory requirements similar to Solvency II

Clients need to put more focus on risk and economic capital; we can offer tailor made solutions

Regulatory changes

Unique protection against inflation through the Adverse Development Cover1

Low inflation

Quarterly actuarial reserving process Reserves estimated at best estimate

Reserve releases

Excellent capitalisation, allowing business growth Group Swiss Solvency Test (SST) ratio 245%2

Capitalisation


High Growth Markets (I) Tangible growth opportunities exist

Agriculture Nat Cat Infrastructure

Life Health

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High Growth Markets (II) A contributor to Swiss Re's targets

High growth rates allow emerging markets to "emerge" rather quickly

– High Growth Markets (including BRICs) now constitute ~15% of premiums…

– …expected to grow to 20-25% by 2015

– Profitability above our hurdle rates

Tangible opportunities in most lines

– Reinsurance: e.g. nat cat, solvency

– Corporate Solutions: infrastructure and engineering projects, commercial property

High Growth Markets not an "option", but a contributor towards our financial targets

-10%

0%

10%

20%Non-life insurance, real premium growth

-10%

0%

10%

20%

Emerging Asia Middle East Latin America Central &EasternEurope

Industrialisedmarkets

Life insurance, real premium growth

2008 2009 2010 2011 2012 2013

Source: Swiss Re Economic Research & Consulting


We see plenty of promising opportunities Innovation and growth also in Europe

Natural catastrophe losses 1980-2012 in USD bn

% of people claiming to be financially "well positioned" in event of suffering a long-term illness or disability, or death

Note: Loss amounts indexed to 2012

Source: Swiss Re sigma catastrophe database

0

50

100

150

200

250

300

350

400

1980 1985 1990 1995 2000 2005 2010

Presenter

Presentation Notes


Outlook Perform and grow

Address low returns in L&H

L&H Reinsurance: in depth review to be carried out; detailed results at June Investors' Day

Admin Re®: continue to evaluate deals based on Group profitability requirements; strengthen operational efficiency; third-party capital

P&C Reinsurance: successful renewals expected to continue throughout 2013, expect net premium growth from expiry of QS

Corporate Solutions: on track to achieve profitable growth targets

Outperform our peers in P&C

Continue to deliver on our unchanged Group strategy

Special emphasis on high growth markets, in all business lines Group strategy

Delivering the 2011-2015 financial targets remains Swiss Re's top priority

Carry on active capital management in line with dividend policy

Measured asset re-balancing towards credit and equity continues Capital and asset management

17


Thank you

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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

Lorenz Fichter Simone Fessler +41 43 285 7129 +41 43 285 7299

Corporate calendar 24 June 2013 Investors' Day Zurich 08 August 2013 Second Quarter 2013 results Conference call 09 September 2013 Investors and Media meeting Monte Carlo 07 November 2013 Third Quarter 2013 results Conference call 20 February 2014 Annual Results Conference call

Corporate calendar & contacts

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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, including as a result of concerns over, or adverse developments relating to, sovereign debt of euro area countries;

further 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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exane bnp paribas 15 th european ceo seminar: will the

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