Swiss Re AG

Good morning or good afternoon.

Welcome to Swiss Re's half-year 2023 results conference call. Please note, today's recording is recorded. At this time, it's my pleasure to hand over to Christian Mummentaler, Group CEO. Please go ahead, sir.

Thank you very much, and good morning, good afternoon, and good evening to all of you. Thank you for joining our call. I'm here with John Dacey, our Group CFO, and Thomas Bohun, our Head of Investor Relations, to talk you through the half-year results. As usual, I will make a few remarks at the beginning, which try to summarize a little bit my view on the results before we open up for Q&A. So, we are reporting a solid H1 result today, which put us, let's say, in line to achieve our 3 billion net income target for 2023, which continues to be our top priority. There's two main structural factors helping us vis-à-vis the previous years, of course. The first one is interest rates. The increase in interest rates is very, very significant. The asset side is contributing much more than it was in the past. While at the same time, the negative effects of this phase, which was the inflation, which we put up a reserve of more of a billion last year, is holding up well and if anything it looks like we have been a little bit conservative with that one so the negative effects of of this phase have been absorbed last year while the positives are coming are are here and are coming in the future years second structural benefit of course is renewals so we have we're very satisfied or i'm very happy with the renewals and where we have come to You have seen in the slides that in 1.7, which is more focused on the US, we have continued to cut some of the lines, some of the MGAs that were not performing, some of the liability covers that we're not happy with. We certainly encouraged the new leadership team in P&C RE to be very open and focused on shareholder return and cut if they think it needs to be cut. Overall, we're very pleased with the renewals and the results are better than what we've seen over the last few years, cumulative. And overall, this creates a very positive environment for P&C REIT, obviously on the back of some very difficult years. So with these two factors that are underlying a lot of things, I just say a few words to the different businesses. Corso, I don't think I need to say much. They continue to perform extremely well. There's really not much to say there. What I'm pleased to see is that we continue to see risk-adjusted price increases. A year or two ago, we might have not expected that, but I think that the increase in reinsurance prices is finding its way through inflation, of course, some of the uncertainties, the climate change, et cetera, the different factors that play a role. But I'm pleased to see that a year today, we were about 4% up in terms of risk-adjusted which is good for this market. Life nursery had a better quarter than the first quarter. The first quarter was affected a lot by the excess mortality in Q4 and Q1 this year due to the flu season and probably also part of COVID. Q2 was still affected by that. We were at the end of the value chain. Some of the data is very detailed, but some of the data comes more in bulk format. And so also in Q2, there was some effects, some negative effects from this Q4 and Q1 phase. This said, if we look at CDC data in the US, so population mortality data, there's a reason to be cautiously optimistic about the future. The excess mortality at the population level has gone down quite significantly since that time. But of course, as a reinsurer, we're at the end of the value chain, and there's always a bit of a delay in terms of when it comes to us, and there's always the risk that our population, which is different to the overall population, could have different characteristics. But overall, with where we are, we believe we can make the target of 900 million. And in PNC RE, after a difficult Q1, which was, of course, hit by the earthquake in Turkey, which was one of the biggest, actually, in our history in terms of amounts, we had a light NACAT Q2. I have to say, we and probably other reinsurers Because overall, it was a heavy NACAT Q2. Overall, the estimate is that it's about 50 billion of market loss by half year. So this will be a heavy NACAT year. It's just that many of these NACAT losses were relatively small, like the convective storms in the US, and haven't hit the retention levels of reinsurers. So from my perspective, I'm really happy about all the re-underwriting we did, the moving up of retentions. All of that seems to work out as expected. On the reserves, the reserves are flat in Corso and P&C RE. Of course, we publish also some of the line of business views, so this has caused some questions today. I can understand that. The pattern we saw over the last few years is continuing in the sense that we had to strengthen, wanted to strengthen the casualty reserves. There were some negative filings from clients, plus, of course, some of our assumption changes while at the same time we could compensate that with P&S reserves, which had enough conservatism in them for us to release some of these reserves. We published the triangles once a year, so of course you saw the triangles in April or May, so I think there's a significant level of transparency over the reserves, and you can see there also some of the stronger parts of the reserves, some of the weaker ones, but overall, again, the result is flat. When it comes to casualty, it is, of course, the big question how to interpret that. We had a few quieter quarters. This is all due to the closing of courts in the U.S., and so now they have reopened. And the difficulty, of course, for everybody, this is an industry-wide issue, obviously, is to estimate how much is it a trend and how much is it an acceleration or compression of timeline because the courts were closed and probably focused when they reopened on more criminal cases. And then you would have a pent-up demand, so to say, on that side. So this distinction, I think nobody can give it, but we will, of course, see that over the next quarter. So that's on the business units. What I also want to mention, of course, the capital position remains extremely strong with around 300% SFT ratio. Shouldn't be a surprise, but this is probably one of the highest levels we've had in a very long time. So that's good. With this half year, we continue to be totally focused, of course, in the second half of the year on achieving our goals, our targets. And with that, I hand over to Thomas.