Swiss Re AG

Good morning or good afternoon. Welcome to Swiss Re's Annual Results 2022 Conference Call. At this time, I would like to turn the conference over to Christian Momentala, Group CEO. Please go ahead, sir.

Thank you very much and good morning, good afternoon, everyone here, from me as well. I'm here with John Dacey, our Group CFO, Moses Ojezehoba, our Reinsurance CEO, and Thomas Pohun, our Head of Investor Relations, to talk you through the Annual Results 2022. So let me maybe start with just a few points. 22 was obviously a tough year with a lot of factors that affected our results, like the war in Ukraine, inflation, the financial markets, NACAT losses, COVID, et cetera, et cetera. I think it's important to stress, of course, that Q4 was a good quarter, a clean quarter for all the businesses, but a very good combined ratio in P&T REIT. And that's while taking some actions on the economic inflation front. We had good results in life in the three, 200 million approximately, and hope definitely to of the three quarters to see the pandemic go behind us. We had Corso good performance, 93.1 combined ratio, which is the same for the full year. So they continue to perform well. And then we saw increased improvements on the investment front with higher reinvestment yields. And all of that leads us to believe that next year, overall, the recurring investment yields should lead to about 400 plus millions compared to this year, to 2022. And then we had a strong capitalization, which supports a dividend of 6.4 U.S. dollars. As you know, we switched to U.S. dollars because it's our currency in which we report and is also underlying from an economic perspective, a currency that is very important for Swiss Re in contrast to Swiss Francs. So we also had a successful start into the new year. You have seen the renewals data. We're personally very excited about that. We think we had a very good renewal. We're happy about the results. But I also need to stress that it was needed. It was needed for the reinsurance industry. the price increase in the industry have historically lagged behind what we could see in the primary insurance space and the corporate solution space. So it was really needed. And you could also see last year, 22, the underlying combined ratio actually deteriorated because of the high inflationary pressure. So it was needed, appropriate, but we're still very happy of how we could navigate the situation, get through some volume growth, very high price increases of 18%, of course, eaten up partially by inflation and model updates of 13%. So a net 5% improvement, which should translate into an improvement of the combined ratio of the underwriting year of about three points. We were also proud that we had actually investors coming in, and towards the end of the year, they saw the underwriting performance as good and wanted to participate. So we're also able to increase our sidecar funds to almost $3 billion. And the reason I mentioned that is because of the trust is an important sign to us and our underwriting that we've got these investors coming in. In terms of all of that makes us optimistic in terms of the targets and where we want to go. We didn't change the multi-year targets. So the with this 14% group ROE, which is on the normalized equity basis. And of course, we will have to translate that into an IFRS ROE, and we intend to do that at the investor day at the end of December of this year. And there's no change to the message that the IFRS equivalent should benefit from higher earnings on the life and health side, while shareholder equity also expected to be significantly higher than where it is now in U.S. GAAP. Then when it comes to Twenty-three, P&C moved to a reported combined ratio target. So if you look at the quality of the portfolio we have now and everything else, if you're comfortable to do that. So the target is less than 95%. The starting point, of course, is impacted by the inflation. So we think something like 96% is probably the starting point. And then you take into account the renewal we had so far. the three-point improvement on the underwriting basis, which gets earned through, of course, through two years. And that gets to a sense of how we got to the 95, less than 95. On the Life and Health RE side, we increased the target from 300 to 900 billion. There's still a bit of COVID in that, assuming, as we could see, the last three quarters, but much more subdued. And also, as we had communicated previously, see less of a drag or expect less of a drag from the pre-2004 business in the U.S. So this explains this number. And of course, we improved one point of the target ratio compared to last year to less than 94. And I think it's important not to forget that there's also inflationary pressures around us, including in the U.S., as evidenced in the results, the Q4 results of other primary companies. And although reinsurance got more expensive, fortunately, But, of course, this has an impact on the expectations for the combined ratio of Corso. And then all of that, of course, leads to this target of more than $3 billion of net income. We used to have an RE target, but we felt that there were concerns in this community what an RE target means in US GAAP in this rate environment with rapidly increasing rates. And so we, for this year, switched to a net income guidance, so to say, And then next year we intend to go back to ROE since the IFRS equity is much more stable than the GAP one. So clearly I think a very different and more optimistic place we start from this year compared to 2022, but we also stay vigilant and focused on all the risks we see around us. And I think with that I hand over to Thomas for Q&A.

Thank you, Christian. Before we start, if I could just remind you to limit yourself to questions, and then should you have follow-up questions, please rejoin the queue. With that, operator, could we have the first question, please?