Swiss Re reports nine months 2017 loss of USD 468 million after large insurance claims from recent natural catastrophe events

Transcription

1 News relese Swiss Re reports nine months 2017 loss of USD 468 million fter lrge insurnce clims from recent nturl ctstrophe events Group net loss of USD 468 million for the first nine months 2017; impcted by expected lrge insurnce clims of USD 3.6 billion following hurricnes Hrvey, Irm, Mri, nd the Mexico erthqukes Property & Csulty Reinsurnce net loss USD 652 million Life & Helth Reinsurnce net income USD 741 million Corporte Solutions net loss of USD 762 million Life Cpitl gross csh genertion t USD 789 million, net income USD 152 million Group investment portfolio continued strong 2017 performnce; return on investments of 3.5% nd running yield of 2.9% Swiss Re will strt public shre buy-bck progrmme on 3 November 2017 Zurich, 2 November 2017 Swiss Re reported Group net loss of USD 468 million for the first nine months of 2017, reflecting the USD 3.6 billion expected insurnce clims from hurricnes Hrvey, Irm, Mri, nd the Mexico erthqukes. P&C Re's nd Corporte Solutions' results were both ffected by these severe events, with P&C Re reporting USD 652 million net loss nd Corporte Solutions USD 762 million net loss. L&H Re continued to generte strong results nd Life Cpitl delivered strong gross csh genertion. Swiss Re mintined very strong cpitl position nd high finncil flexibility. As result, Swiss Re lunches its public shre buy-bck progrmme of up to CHF 1.0 billion on 3 November Medi Reltions, Zurich Telephone New York Telephone Hong Kong Telephone Investor Reltions, Zurich Telephone Swiss Re Ltd Mythenqui 50/60 CH-8022 Zurich Telephone Fx Swiss Re's Group Chief Executive Officer, Christin Mumenthler, sys: "The severe nturl ctstrophes we hve experienced so fr this yer hve clerly impcted our results. At the sme time, we re ble to bsorb these losses nd join forces with our clients to help ffected people nd businesses in getting bck on their feet. This shows tht our strtegy to ensure superior cpitlistion t ll times is pying off. We believe we hve the finncil strength to respond to potentil mrket developments nd we continue to sty committed to creting long-term shreholder vlue." Group results mrked by nturl ctstrophes Swiss Re reported nine months 2017 net loss of USD 468 million, compred to net income of USD 3.0 billion for the sme period in 2016.

2 The decline ws primrily driven by the previously communicted expected insurnce clims in the ftermth of the recent Atlntic hurricnes, the erthqukes in Mexico s well s Cyclone Debbie in Austrli nd floods in Peru in the first hlf of the yer. Overll, Swiss Re expects its insurnce clims from nturl ctstrophes for the first nine months of 2017 to mount to pproximtely USD 4.0 billion t Group level, with round USD 3.0 billion being incurred by P&C Re nd pproximtely USD 1.0 billion by Corporte Solutions. Swiss Re generted n nnulised return on equity (ROE) of -1.9% in the first nine months while it continued to invest into its business. The Group's nnulised return on investments (ROI) ws strong t 3.5% nd the fixed income running yield ws stble t 2.9%. for the first nine months declined 5.1% to USD 26.7 billion, s Swiss Re pplied its disciplined underwriting pproch in chllenging mrket conditions. Mesured t constnt foreign exchnge rtes, the decline would hve been 4.2%. As result of the lrge nturl ctstrophe losses, the Group hs strengthened Corporte Solutions' cpitl position with USD 1.0 billion cpitl injection. This underlines Swiss Re's commitment to this business, given the ttrctiveness of the commercil insurnce mrket nd the confidence in the Business Unit's long-term strtegy. Swiss Re's Group Chief Finncil Officer, Dvid Cole, sys: "Even fter such string of severe nturl dissters, we demonstrte the strength of our cpitl position nd finncil flexibility by supporting our clients, responding to mrket developments nd strengthening Corporte Solutions' cpitl position, while continuing to reptrite excess cpitl to our shreholders s shown by the upcoming lunch of our shre buybck-progrmme." P&C Re result impcted by high nturl ctstrophe clims Expected combined clims of USD 3.0 billion from this yer's lrge nturl ctstrophe losses led to strong decline in P&C Re's results. The net loss for the first nine months mounted to USD 652 million. P&C Re expects losses from Hurricnes Hrvey, Irm, Mri, nd the Mexicn erthqukes to mount to USD 2.65 billion. The nnulised ROE ws -7.5%. The combined rtio incresed to 114.1%, s the impct from lrge nturl ctstrophe losses ws well bove expected levels for these nine months. P&C Re continued to experience positive prior-yer development during the first nine months of Swiss Re mintined its strict disciplined underwriting pproch, ensuring it receives n dequte price for the protection it provides. This resulted in 2

3 12.6% decline in gross premiums written to USD 13.4 billion in the first nine months. L&H Re continues to show strong performnce L&H Re delivered strong net income of USD 741million in the first nine months, driven by good underwriting result nd good investment performnce. ROE on n nnulised bsis ws 14.3%. The fixed income running yield for the first nine months ws 3.3% compred to 3.4% in the first nine months of for the first nine months incresed 1.4% to USD 9.7 billion compred to the first nine months of lst yer, minly due to new wins nd business growth in the US nd Asi. Corporte Solutions result significntly impcted by nturl ctstrophe events Corporte Solutions incurred net loss of USD 762 million in the first nine months. The result ws significntly impcted by the recent events in the US, which is Corporte Solutions' lrgest mrket, the Cribben nd Mexico. The Business Unit expects to incur clims of pproximtely USD 975 million for these recent events. As leder in excess lyers 1 nd net cpcity provider, 2 Corporte Solutions' results re subject to higher voltility, nd lrge losses cn be bsorbed by the very strong blnce sheet of the Swiss Re Group. The combined rtio for the first nine months of 2017 ws 142.6% nd the nnulised ROE ws -56.0%. 3 incresed by 1.9% to USD 2.9 billion in the first nine months. Swiss Re strengthened Corporte Solutions' cpitl position, underlining Swiss Re's commitment to this business nd its long-term strtegy. With Corporte Solutions, Swiss Re hs built unique pltform to ccess the lrge pool of commercil risks. The Business Unit is expected to benefit from pricing improvements following the recent nturl ctstrophe events. Life Cpitl delivers strong gross csh genertion Life Cpitl continued to deliver on its strtegy to optimise csh genertion. In the first nine months of 2017, gross csh genertion mounted to strong USD 789 million, reflecting the continued emergence of the underlying surplus in ReAssure, its closed book business in the UK, including benefit from finlising the 2016 yer-end sttutory vlution nd n updte to mortlity ssumptions. 1 An excess lyer provider offers coverge bove the limit provided by the primry insurer, fter clim is mde nd the first lyer of protection hs been exhusted. 2 A net cpcity provider retins the risk without reinsuring it or with very limited reinsurnce. 3 Including premiums for insurnce in derivtive form, net of internl fronting for the Reinsurnce Business Unit. 3

4 The Business Unit generted net income of USD 152 million. As expected, lrge one-off relised gins on the investment portfolio in 2016 were not repeted. The nnulised ROE for the first nine months ws 2.9%. for the first nine months incresed 5.5% to USD 1.2 billion, driven by growth in the open book business, which demonstrtes how Life Cpitl is incresing Swiss Re's ccess to ttrctive nd growing risk pools in life nd helth mrkets. In October, Swiss Re nnounced n greement with Jpnese insurnce group MS&AD for minority investment of up to GBP 800 million into ReAssure. The investment strengthens ReAssure's bility to pursue future trnsctions nd is consistent with the execution of Swiss Re's previously communicted strtegic intentions for Life Cpitl's closed book business. Swiss Re will strt public shre buy-bck progrmme on 3 November 2017 Hving received ll required regultory pprovls, Swiss Re will lunch its public shre buy-bck progrmme of up to CHF 1.0 billion purchse vlue on 3 November 2017, to chieve its objective of returning cpitl to shreholders when excess cpitl is vilble nd other business opportunities do not meet its profitbility requirements. The public shre buybck progrmme ws previously uthorised by Swiss Re's shreholders in April For further detils of the shre buy-bck progrmme, plese visit: Long-term focus will remin key to success The most recent hurricnes nd erthqukes re reminder tht lrge nturl ctstrophes cn hve significnt short-term finncil impct nd crete ernings voltility. The bility, however, to fce these chllenges nd support clients while strting new shre buy-bck progrmme, shows the success of Swiss Re's strtegy nd its focus on the long-term. Innovtion, combined with reserch nd development, is n importnt building block to remin relevnt. In October, Swiss Re contributed to disster risk reduction with the lunch of Globl Storm Surge Zones. This is unique model tht identifies which globl cities re most t risk from storm surges. The tool is designed to prevent losses nd ssess risk nd cretes mny new possibilities for preventive plnning. It is lso bsis for offering sustinble insurnce to those t risk, by putting price tgs on risk. Swiss Re's Group Chief Executive Officer, Christin Mumenthler, sys: "The entire re/insurnce industry is now required to demonstrte its criticl role nd responsibility subsequent to the trgic nturl ctstrophes of the recent months. In my view, mny lines of business 4

5 hve been operting in n unsustinble environment. We expect pricing conditions to improve going forwrd not only in reinsurnce but lso in commercil insurnce. In ddition, we re strongly positioned to work with our prtners to cpture mrket opportunities when they rise s they often do fter such events nd continue to tckle protection gps round the world. We will continue to focus on our disciplined underwriting strtegy s it hs proven right over recent yers nd hs provided us with strong bse for our future." 5

6 Detils of yer-to-dte performnce (9M 2016 vs 9M 2017) 9M M 2017 Consolidted Group (Totl) Net income/loss Return on equity (%, nnulised) Return on investments (%, nnulised) Running yield (%, nnulised) P&C Reinsurnce Common shreholders' equity Net income/loss Combined rtio (%) Return on equity (%, nnulised) L&H Reinsurnce Net income Running yield (%, nnulised) Return on equity (%, nnulised) Corporte Solutions Net income/loss Combined rtio (%) Return on equity (%, nnulised) Life Cpitl Net income Gross csh genertion Return on equity (%, nnulised) Also reflects Group Items, including Principl Investments. 6

7 Notes to editors Medi cll Swiss Re will hold medi cll this morning t 8:30 m (CET). If you pln to dil in, you re kindly requested to cll 10 minutes prior to the strt using the following numbers: From Switzerlnd: +41 (0) From Germny: +49 (0) From UK: +44 (0) From Frnce: +33 (0) From USA: +1 (1) From Hong Kong: Investors nd nlysts conference cll Swiss Re will hold n investors nd nlysts conference cll this fternoon t 2 pm (CET) which will focus on Q&A. You re kindly requested to dil in 10 minutes prior to the strt using the following numbers: From Switzerlnd: +41 (0) From Germny: +49 (0) From UK: +44 (0) From Frnce: +33 (0) From USA: +1 (1) Swiss Re The Swiss Re Group is leding wholesle provider of reinsurnce, insurnce nd other insurnce-bsed forms of risk trnsfer. Deling direct nd working through brokers, its globl client bse consists of insurnce compnies, mid-to-lrge-sized corportions nd public sector clients. From stndrd products to tilor-mde coverge cross ll lines of business, Swiss Re deploys its cpitl strength, expertise nd innovtion power to enble the risk-tking upon which enterprise nd progress in society depend. Founded in Zurich, Switzerlnd, in 1863, Swiss Re serves clients through network of round 80 offices globlly nd is rted "AA-" by Stndrd & Poor's, "A3" by Moody's nd "A+" by A.M. Best. Registered shres in the Swiss Re Group holding compny, Swiss Re Ltd, re listed in ccordnce with the Interntionl Reporting Stndrd on the SIX Swiss Exchnge nd trde under the symbol SREN. For more informtion bout Swiss Re Group, plese visit: or follow us on For logos nd photogrphy of Swiss Re executives, directors or offices go to For medi 'b-roll' plese send n e-mil to Medi_Reltions@swissre.com 7

8 Cutionry note on forwrd-looking sttements Certin sttements nd illustrtions contined herein re forwrd-looking. These sttements (including s to plns, objectives, trgets, nd trends) nd illustrtions provide current expecttions of future events bsed on certin ssumptions nd include ny sttement tht does not directly relte to historicl fct or current fct. Forwrd-looking sttements typiclly re identified by words or phrses such s nticipte, ssume, believe, continue, estimte, expect, foresee, intend, my increse, my fluctute nd similr expressions, or by future or conditionl verbs such s will, should, would nd could. These forwrd-looking sttements involve known nd unknown risks, uncertinties nd other fctors, which my cuse the Group s ctul results of opertions, finncil condition, solvency rtios, cpitl or liquidity positions or prospects to be mterilly different from ny future results of opertions, finncil condition, solvency rtios, cpitl or liquidity positions or prospects expressed or implied by such sttements or cuse Swiss Re to not chieve its published trgets. Such fctors include, mong others: further instbility ffecting the globl finncil system nd developments relted thereto; further deteriortion in globl economic conditions; the Group s bility to mintin sufficient liquidity nd ccess to cpitl mrkets, including sufficient liquidity to cover potentil recpture of reinsurnce greements, erly clls of debt or debt-like rrngements nd collterl clls due to ctul or perceived deteriortion of the Group s finncil strength or otherwise; the effect of mrket conditions, including the globl equity nd credit mrkets, nd the level nd voltility of equity prices, interest rtes, credit spreds, currency vlues nd other mrket indices, on the Group s investment ssets; chnges in the Group s investment result s result of chnges in its investment policy or the chnged composition of its investment ssets, nd the impct of the timing of ny such chnges reltive to chnges in mrket conditions; uncertinties in vluing credit defult swps nd other credit-relted instruments; possible inbility to relise mounts on sles of securities on the Group s blnce sheet equivlent to their mrk-to-mrket vlues recorded for ccounting purposes; the outcome of tx udits, the bility to relise tx loss crryforwrds nd the bility to relise deferred tx ssets (including by reson of the mix of ernings in jurisdiction or deemed chnge of control), which could negtively impct future ernings; the possibility tht the Group s hedging rrngements my not be effective; the lowering or loss of one of the finncil strength or other rtings of one or more Swiss Re compnies, nd developments dversely ffecting the Group s bility to chieve improved rtings; the cycliclity of the reinsurnce industry; uncertinties in estimting reserves; uncertinties in estimting future clims for purposes of finncil reporting, prticulrly with respect to lrge nturl ctstrophes, s significnt uncertinties my be involved in estimting losses from such events nd preliminry estimtes my be subject to chnge s new informtion becomes vilble; the frequency, severity nd development of insured clim events; cts of terrorism nd cts of wr; mortlity, morbidity nd longevity experience; policy renewl nd lpse rtes; extrordinry events ffecting the Group s clients nd other counterprties, such s bnkruptcies, liquidtions nd other credit-relted events; current, pending nd future legisltion nd regultion ffecting the Group or its ceding compnies nd the interprettion of legisltion or regultions; legl ctions or regultory investigtions or ctions, including those in respect of industry requirements or business conduct rules of generl pplicbility; chnges in ccounting stndrds; significnt investments, cquisitions or dispositions, nd ny delys, unexpected costs or other issues experienced in connection with ny such trnsctions; chnging levels of competition; nd 8

9 opertionl fctors, including the efficcy of risk mngement nd other internl procedures in mnging the foregoing risks. These fctors re not exhustive. The Group opertes in continully chnging environment nd new risks emerge continully. Reders re cutioned not to plce undue relince on forwrd-looking sttements. Swiss Re undertkes no obligtion to publicly revise or updte ny forwrd-looking sttements, whether s result of new informtion, future events or otherwise. This communiction is not intended to be recommendtion to buy, sell or hold securities nd does not constitute n offer for the sle of, or the solicittion of n offer to buy, securities in ny jurisdiction, including the United Sttes. Any such offer will only be mde by mens of prospectus or offering memorndum, nd in complince with pplicble securities lws. 9