Corporate Solutions. Agostino Galvagni CEO Corporate Solutions

Transcription

1 Corporate Solutions Agostino Galvagni CEO Corporate Solutions

2 On track to deliver against 2015 targets Economic Net Worth 1 10% Commercial insurance Business Unit of the Swiss Re Group A key opportunity for growth Gross premiums written in USD bn in % Return on Equity 18.7 Target range 2015: ~4 Target range 2015: Baseline year E M Share of Swiss Re Group s Economic Net Worth deployed across Business Units (excl. Group Items), 30 June 2015 Note: Gross premiums written including premium for insurance in derivative form, net of internal fronting for the Reinsurance Business Unit; ROE shown from 2012 as Corporate Solutions has been reported as separate segment from Q1 2012; 9M 2015 ROE is annualised 65

3 Corporate Solutions has transformed itself since launch in Baseline year 2015 Achieved Employees ~1 000 ~2 400 Offices Operating platform Operational sustainability Sales Underwriting Harmonise and upgrade Improve and maintain Segment and upgrade Maintain excellence 66

4 and so has our balance sheet, aligning with peers Assets Liabilities in USD bn M 2015 in USD bn M 2015 Assets under management Reinsurance recoverables % 8.9 Equity Subordinated debt Other assets % 7.1 Other Liabilities Assets under management to gradually replace reinsurance recoverables which produce no investment income Composition of funding changed with the introduction of subordinated debt Note: Corporate Solutions has been reported as separate segment from Q1 2012, with pro forma figures available for the prior year 67

5 Corporate Solutions Agenda I systematically allocate capital to risk pools / revenue streams broaden and diversify client base to increase access to risk I optimise resources and platforms to support capital allocation emphasise differentiation 68

6 I I Our portfolio is well diversified across lines of business, geographies and industries By line of business By geography GPW 9M 2015 GPW 9M 2015 Credit & Surety Special Lines Casualty 14% 21% 29% 36% Asia Pacific Latin America EMEA 8% 11% 24% 57% Property North America By industry GPW 27% 3% 4% 16% 5% 4% 7% 10% 8% 16% Food & Tobacco Retail & Trading Life Sciences Professional Services Aviation Transportation Energy & Utilities Engineering & Construction Mining Credit, Agriculture, Weather Note: Gross premiums written (GPW) including premium for insurance in derivative form, net of internal fronting; Special Lines includes Aviation & Space, Engineering, Marine and Energy Offshore; portfolio composition by industry relates to 9M

7 Combined ratio I I We delivered strong profitable growth compared to peers since % 86% Since 2010, continuously benchmarking ourselves against a selected set of 8 peers 95% Insurers with global master policy capabilities Insurers with wholesale focus Insurers with multiregional focus Corporate Solutions 110% -6% 5% 13% 16% Quadrants are determined based on average combined ratio and gross premiums compound annual growth rate (CAGR) over the years; bubble size = 2014 base Gross premiums growth CAGR Source: Swiss Re Economic Research & Consulting Note: Peer group average weighted premium growth is in USD; Corporate Solutions combined ratio is on basis of estimated total financial contribution to Swiss Re Group (ie Corporate Solutions business written, as shown at Investors' Day 2012, incl. development of historical loss reserves remaining in Reinsurance); combined ratio is shown starting 2011 as Corporate Solutions has been reported as separate segment from Q1 2012, with pro forma figures available for the prior year 70

8 Combined ratio 9M 2015 I I but are very careful in the current market 85% Focused on maintaining underwriting discipline 92% 95% Insurers with global master policy capabilities Insurers with wholesale focus Insurers with multiregional focus Corporate Solutions 104% -19% -8% -2% 15% Gross premiums growth 9M 2015 vs. 9M 2014 Quadrants are determined based on average combined ratio and average gross premium growth rates; bubble size = 9M 2015 base where available, otherwise H Source: Swiss Re Economic Research & Consulting Note: Peer group average weighted premium growth is in USD; due to consolidation in market number of peers reduced to 7 over the period 71

9 I I The commercial insurance market is very diverse and fragmented. Corporate Solutions ranks 25 th overall... Top-30 Players beyond top-30 Top-10 represent ~20% of market Top represent ~15% of market Corporate Solutions 4.2 Insurers with global master policy capabilities Insurers with multiregional focus Insurers with regional focus Insurers with wholesale focus Source: Swiss Re Economic Research & Consulting Note: 2014 commercial insurance market premium: USD 740bn. In case of players writing business other than commercial insurance, only the commercial insurance premiums are shown 72

10 Penetration I I but is a leader in the Excess Layer Market, and expanding into the next segment 2014 commercial insurance market premium: USD 740bn in USD bn Excess Layers (large corporations) Primary Lead (mid-sized corporations) Wholesale Deal size Main characteristics Deal complexity Global Master Policies 60 SMEs Workers Compensation and Commercial Auto Retail Granularity of distribution Administrative load Source: Swiss Re Economic Research & Consulting 73

11 I I We are on our way to become a Primary Lead insurer Ambition: Generate additional premiums of USD 1.0bn 1.5bn by 2020 North America: Canada (P&C) US (Property, FinPro; 2016: Casualty) EMEA: Italy (P&C, FinPro, Marine) France (P&C, Marine) Germany (P&C; 2016: FinPro) UK (2016: P&C, FinPro) Netherlands (2016: P&C) South Africa (2016: P&C) Switzerland (2016: P&C, FinPro) Latin America: Colombia (Casualty; 2016: Property) Brazil (Property, Marine; 2016: Casualty) Asia Pacific: China (P&C) Singapore (Casualty, FinPro) Australia (2016: Property) Primary Lead capabilities (in place or to be rolled-out in 2016) Capabilities being developed: Products: Develop primary products in line with local standards; ability to price primary products Services: Establish local services (esp. Claims and Risk Engineering) Systems: Integrate management of co-insurance panels into current platforms and processes 74

12 I I Our distribution footprint is global and growing 52 offices across 20 countries North America: 23 offices EMEA: 12 offices Asia Pacific: 10 offices Latin America: 7 offices Local presence & insurance license Note: Latin America includes Miami as hub for the region Local presence & reinsurance license Local insurance license 75

13 I I and we strengthened our presence in our 12 key High Growth Markets Mexico Turkey UAE Dubai office opened in 2012 India China Sun Alliance China acquisition in 2015 Hong Kong Colombia Seguros Confianza acquisition in 2014 Chile Brazil UBF acquisition in 2011 South Africa Office opened in 2015 Singapore Insurance license obtained in 2013 Malaysia Reinsurance license obtained in 2015, Origination/UW out of Singapore Already well covered Local presence to be strengthened No local presence 76

14 Number of employees I I We hired ~2 000 new employees since launch in October Baseline year ~7% 2015 Achieved ~25% ~600 ~600 Inorganic growth ~200 Intra Group shifts (~600) ~600 Attrition Replacements 33 ~2 400 ~1 000 Organic growth Tailor-made onboarding programme Employee engagement index 12% above global financial insurance industry Share of staff in High Growth Markets increased to ~25% X% Share of High Growth Markets 77

15 I I and we significantly increased our productivity Work units per FTE Premiums per FTE in USD m 2013 H H % productivity increase +10% productivity increase ~110 ~135 ~2.9 ~3.2 Productivity gains achieved through: Re-design and simplification of end-to-end underwriting process More efficient allocation of underwriting tasks, leveraging service centres Re-shaping of IT landscape Note: Work units per FTE are transactional actions related to handling submissions, submitting quotes and binding transactions. FTE are weighted: underwriters/originators: 1, business support: 0.5, service centre support: 0.25; productivity metrics are rolling full-year views available since 2013; lower increase in Premium per FTE compared to Work units per FTE mainly reflects shift towards smaller deal size 78

16 I I Three key factors differentiate us from competitors Corporate Solutions' value proposition Leading brand Opens doors and attracts talents Financial strength "We are here to stay Large net capacity Innovation ~500 transactions with USD 100m capacity or more in 2014 Supported by Superior underwriting knowledge Disciplined cycle management Proactive claims management ~40 innovative transactions in

17 I I Innovation capabilities in several areas, acknowledged by the market Bespoke structures New risks Derivative solutions Multi-line/multi-year solutions Non-damage business interruption Parametric solutions Cyber risk: Partnership with IBM Temperature and weather related derivatives Crop shortfall derivatives Awards Innovative transaction of the year in Switzerland 2015 Energy Risk Weather House of the year 2012, 2013, 2014 First solar radiation index transaction in China

18 Corporate Solutions Agenda I systematically allocate capital to risk pools / revenue streams broaden and diversify client base to increase access to risk I optimise resources and platforms to support capital allocation emphasise differentiation Summary and Q&A 81

19 Key messages On track to deliver against 2015 targets Conclusion Transformed into a larger and more solid player, with a Distinct value proposition building on our leading brand, large net capacity and innovation capabilities Leadership position in the Excess Layer Market Distribution network of 52 offices in 20 countries Ambition to grow, further increasing Corporate Solutions relevance to the Swiss Re Group Outlook & priorities Key initiatives for growth beyond 2015 are Expanding into Primary Lead and Further broadening of the footprint Continue to carefully navigate the current market with unchanged focus on profitability 82

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21 Corporate calendar & contacts Corporate calendar February Annual Results 2015 Conference call 16 March Publication of Annual Report 2015 and EVM April 152 nd Annual General Meeting Zurich 29 April First Quarter 2016 Results Conference call Investor Relations contacts Hotline Philippe Brahin Jutta Bopp Chris Menth Simone Lieberherr Iunia Rauch-Chisacof

22 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. 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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. 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