Swiss Re AG

Good morning or good afternoon. Welcome to Swiss Re's first quarter 2023 results conference call. At this time, I would like to turn the conference over to John Dacey, Group CFO. Please go ahead.

Thank you very much and good morning or good afternoon to everyone on the call from me. I'm here together with Thomas Bowen, our Head of Investor Relations, to talk you through the first quarter 2023 results. Before we go to Q&A, allow me to make a few quick remarks on the release we put out this morning. The first quarter represents a solid start into the year for Swiss Re with a net income of $643 million. Our objective is to make more than $3 billion this year. We believe we are on track and there are a few key drivers for this. First, in PNC Re, we earn the majority of our NatCat premiums in the second half of the year when the Atlantic and Pacific storm seasons occur. Assuming normal experience, This is expected to benefit the combined ratio. We are also benefiting from strong renewals. The 19% price increase achieved in April represents a continued strong momentum in the spirit of what we saw in the January renewals. The 97.2 combined ratio we achieved in the first quarter, despite higher NACAT activity, is therefore in line with our four-year ambition. Secondly, our life and health business is typically impacted by elevated mortality in the first quarter due to the circulation of respiratory viruses, especially the flu in winter months. We expect this impact to reduce in the next quarters on our path to our $900 million net income for life and health three. Thirdly, corporate solutions had an excellent quarter as evidenced by the 90.3 combined ratio. Corporate Solutions price increases accelerated in Q1 compared to the end of last year, and this will benefit margins going forward. Finally, the recurring investment yield continues to increase as expected, reaching 3.1% yield in the first quarter. Interest rates have declined in the last days, but we expect continued upward trajectory as we invest incoming cash at higher rates. On reserves, The overall net reserve development was modestly positive in the first quarter in both P&C units. We saw releases in property lines, while we added the casualty lines mainly in P&C RE, as well as specialty and corporate solutions. In addition to, and very importantly, almost all of the $1 billion inflation IBNRs we set up in 2022 across liability, motor, property, and specialty lines remain in IBNR form. We intend to continue to balance any reserve redundancies with increased caution where required. The main goal is to deliver on a reported combined ratio targets. Capital remains very strong. We've not published an official first quarter SST figure. We estimate the SST ratio as of mid-April to be close to where it was when we started the year. That is around 290%. While we have not renewed some of our investment hedges and saw a negative impact from slightly lower yields, our SST ratios benefited from strong renewals with higher economic income expected, a key factor. And with that, I'll hand over to Thomas to introduce the Q&A session.

Thank you, John, and hello to all of you from my side as well. As usual, before we start, I'd just like to remind you if you could limit yourselves to two questions, and should you have follow-up questions, if you could please rejoin the queue. So with that, operator, could we have the first question, please?