Swiss Re AG

Good morning or good afternoon. Welcome to the Swiss Re's nine-month conference call. Please note that today's conference call has been recorded. At this time, I would like to turn the conference over to Andreas Berger, Group CEO. Please go ahead.

Yes, thank you very much, and good morning or good afternoon to all of you. Thank you for joining us today. Before our Group CFO, John Dacey, will walk you through the details of our nine-month results for 2024, I'll start by briefly sharing some remarks on the reserving actions we announced last week. Last week, we pre-announced that we have significantly strengthened PNC REITs US liability reserves. Specifically, we added 2.4 billion US dollars to PNC REITs prior year nominal US liability reserves in Q3, bringing total prior year US liability reserve additions to 3.1 billion US dollars for the first nine months of this year. Our third quarter action addresses the outcome of a comprehensive review which considered the latest industry data and legal trends. The significant amounts we have added reflect the incorporation of an adverse future scenario into our reserving assumptions. Looking forward, we expect now to sleep well. ridiculously well when it comes to this part of our business. Although, of course, we will remain vigilant and proactive wherever required, in particular when it comes to writing new business. Lost developments in the U.S. liability remain an overall industry issue, and this is why we will remain cautious on new business, as evidenced by the 21% pruning of our book at this year's renewals. At the same time, we have accelerated the achievement of our goal to position ourselves in the overall PNC reserves at the higher end of the best estimate range, specifically at the 90th percentile of the best estimate range. We achieved this because the vast majority, $2.8 billion, of the year-to-date U.S. liability reserves strengthening of U.S. dollars 3.1, as I said, represented a true net increase in reserves, true net increase in reserves, with only very modest reallocation from other lines. The resulting significantly increased reserving strength represents an important step in enhancing the overall resilience of the Swiss Re group and laying the foundation for greater success in future. From here on out, we do not expect negative net reserving impacts to drag down our results. We'll continue to apply the uncertainty load on new business while focusing on our clients, rigorous portfolio steering, disciplined underwriting decisions, and setting prudent initial loss assumptions. Despite the weight of the third quarter reserving actions and the fact that the quarter featured a number of significant natural catastrophe events, The strong underlying underwriting and investment results across all our business units allowed us to post a small profit for the quarter. For the full year 2024, assuming normal natural catastrophe experience, from here on we expect our group net income to exceed US$3 billion. You've also most likely heard about the progress we're making on our decision to withdraw from IPTQ. We announced last week that we sold IPTQ EMEA P&C to Allianz Direct. For the remaining parts of the business, we continue to evaluate options as we aim to maximize the value for the group. I can surely say we are on plan with all our actions. I look forward to providing further details on our near-term priorities at our management dialogue and events on December 13th. On that date, we'll also announce our financial targets for 2025. John Basie will be with me, and we will be joined by Urs Berchi, RP&C RECEO, and also by Philip Long, our group chief actuary, and we're looking forward to an extended Q&A opportunity there In the meantime, believe us, we remain vigilant and focused on sustaining the strong underlying results of all our businesses that have delivered thus far. With that, I'd like to hand over to John Dacey, our Group CFO, for more details on the numbers.

Thank you, Andreas, and good afternoon or good morning to everyone on the call. I'll make a few remarks about the results released this morning before we go to the Q&A. Our group net income stands at $2.2 billion for the first nine months of the year, with a third quarter profit of $102 million. Outside the US liability reserving actions, the main drivers for this result were discipline underwriting, helping the businesses to successfully navigate a third quarter with increased natural catastrophe activity, and also benefiting by strong recurring investment income. P&C REI's nine-month combined ratio of 92.8% reflects the resilient underwriting result, as it includes the net negative impact of 2.8 billion reserves strengthening. The large NACAT claims experience remained favorable for the first nine months with losses of a little over $800 million, compared to a budget for large NACAT losses of about 1.35 billion for those nine months. In the third quarter, we reported large NACAT losses of approximately $750 million, whereas around $600 million were related to events in the third quarter. More specifically, there were four events for which we booked between $120 and $150 million each. Two in Canada, the Calgary hailstorms and Hurricane Debbie, where most of the losses came from Canada. the summer storm Boris in Europe and Hurricane Helene in the third quarter. As a reminder, in the second quarter of 2024, we put up an allowance to cope with the uncertainty of where ultimate claims of some large nat-cat and man-made events would end up. In the third quarter, we booked just below $200 million of additional losses for those events. As we do not expect any further loss creep, we released the remaining IBNR of around $100 million into the third quarter results. On life and health, we reported net income of $1.2 billion for the first nine months of the year, driven by our enforced margins and recurring investment income. Our mortality claims experience in the U.S. remains slightly favorable, although this was more than offset by assumption updates we undertook related to owner's contracts, mainly in the EMEA region. We flagged during the first two quarters that life and health raised net income benefited from a little bit of noise related to the IFRS transition. specifically a tailwind from out-of-period adjustments related to the opening IFRS balance sheet and the 2023 comparatives. In the third quarter, we faced some headwinds from out-of-period adjustments to the amount of about $80 million on the insurance service result. Without this impact, the quarter would have been well in line with our pro rata target. Following an overall successful first nine months of 2024, Life and Health REIT continues to target the net income of approximately $1.5 billion for the full year. We also expect the impact of out-of-period adjustments to reduce going forward as we near the end of our first year of IFRS reporting. Corporate Solutions continues its excellent track record with a nine-month combined ratio of 89.4%, reflecting the strong underlying business performance. The benign man-made experience and favorable premium volume developments in the first nine months were partially offset by losses from large NACCAD events. Corporate Solutions is on track to overachieve the full-year target of the combined ratio of less than 93%. The return on investments was strong through the first nine months of the year at 3.9%, driven by higher contribution from recurring income, which increased by about $400 million year over year. The recurring income yield for the first nine months was 4%, while the reinvestment yield for the third quarter stood at 4.6%, continuing to benefit from higher interest rates. Finally, our capital position remains strong with a group SST ratio of 284% above the top end of our targeted long-term range. The ratio reflects important methodology updates, which reduced the reported headline ratio while significantly lowering the sensitivity to interest rate movements. We provided you with the updated sensitivity in the presentation published today, implying that in the case of a 200 basis points decrease in interest rates, our SST ratio would end up in roughly the same place as under the previous methodology, even though we started from a higher base in that methodology. The sensitivity interest rate has effectively been cut by half. And in this case, the update adds relevance to the target between 200 and 250 basis points over the long term. Looking ahead, as Andreas also mentioned, we expect to achieve a group net income of more than $3 billion for 2024, assuming normal loss activity for the remainder of the year. This outlook reflects the preliminary loss estimate for Hurricane Milton of less than $300 million across PNC Rio and Corso. With that, I'll turn it over to Thomas to help us manage the Q&A.