Swiss Re AG

Good morning or good afternoon. Welcome to Swiss Re's first quarter 2025 key financial data conference call. Please note that today's conference call is being recorded. At this time, I would like to turn the conference over to Andreas Berger, Group CEO. Please go ahead.

Thank you very much and good morning or good afternoon to all of you. I appreciate you taking the time to join us today. Before our Group CFO, our new Group CFO actually for his first time under his master in walks you through the details of our Q1 results, I'd like to start with some brief introductory remarks. We have achieved a good start to the year, delivering a first quarter net income of $1.3 billion and a return on equity of 22%. All business units contributed to this result, also helped by strong investment returns, and this gives us a very good base as we approach the rest of the year. Our financial results were achieved against the backdrop of a quarter that featured significant large losses on the P&C side. Across P&C RE and corporate solutions, large losses amounted to 900 million US dollars, with the LA wildfires contributing around two thirds of that total number, consistent with a preliminary estimate of below 700 million US dollars we provided to you with our full year results in February of this year. Large man-made claims totaled 300 million US dollars in the quarter, which is above average. Despite these impacts, PNCRE and Corporate Solutions produced resilient bottom line results, which also include positive nominal reserving result of just below 200 million US dollars. This is a clear sign of increased resilience, and that's exactly what we strive for I'm happy with the outcome also of the April renewals in P&C RE. The results are consistent with those of the January renewals. Year to date, we have achieved 6% volume growth, while the net price change of a modest negative 1.5% is supportive of our 2025 targets and reflects the overall discipline that we continue to maintain. When you combine volume and price developments, P&C RE's new business CSM of $1.4 billion in the quarter, in the first quarter, is unchanged from the same period a year ago. That's a very solid outcome, and we will look to maintain this as we approach the important mid-year renewals. To stress again, we have no top-line targets. The focus is entirely on maintaining healthy risk-adjusted margins and a high-quality portfolio. Life & Health re-produced a solid start to the year. The $439 million net income is just above the prorated target requirement of $400 million and reflects slightly positive overall claims experience, which is a good sign. We're also making progress on cost. Our admin costs for the quarter are in line with the cost ambitions outlined during our investor event in December last year. Accordingly, we're on track to reduce our cost run rate by at least $100 million this year, contributing to the overall target of $300 million by 2027. We are confident, but also vigilant as we look ahead. Priority number one is to deliver on our targets, and we're in a good place to do that. But we see lots of risks out there, and overall volatility has been high in the past weeks. The macroeconomic environment remains uncertain, and while we're not directly impacted by the ongoing tariff situation, we are watching very closely for related effects, for example, by increased inflation risks. This is where prudent underwriting is absolute key. Our overall portfolio strategy, our focus on setting prudent initial loss picks, and the additional layer of the uncertainty load we apply on your business all contribute to the increased resilience of our earnings power. And with that, I'm happy to hand over to you, Anders, our group CFO. Thank you.

Thank you, Andreas, and again, good afternoon or good morning to everybody on the call. I will make a few remarks on the results you've released this morning before we go to the Q&A session. Andreas has taken you through the highlights of our overall positive first quarter. Let me add a few further details. On revenues, the group's insurance revenue amounted to 10.4 billion USD in the first quarter, down from $11.7 billion last year. There are few exceptional moving parts here. Last year's Q1 revenues included non-recurring IFRS transition effects, primarily related to profit commissions, which were recorded in both revenues and expenses with no impact on the insurance service results. In the subsequent quarters, we refined our methodology by netting these amounts. reducing both revenues and expenses equally since they involve the same counterparties. Another component is in life and health three, one that we flagged last year. This related to the termination of an external retrocession transaction with no bottom line impact. On top, we have seen negative FX impacts this quarter across our businesses. So on a like-for-like basis, revenues are broadly flat at the group level, up around 1% to 2% in life and health RE, up around 4% to 5% in corporate solutions, and a low single-digit decline in P&C RE. For the rest of the year, we would expect stable revenues compared to 2024. Earnings are what matter, and we continue to see good resilience here. Despite some pressure on rates across our P&C businesses, the new business CSM production of the group remained very healthy at $1.7 billion in Q1, down only marginally from last year's $1.8 billion figure. Let me move on to the insurance service result of our businesses. In P&C RE, you will notice a decline in the Q1 CSM release versus last year's period. The $710 million release this year is down from last year's $953 million. This decrease was driven by the earn through of prudent initial loss picks, including impact of new business uncertainty allowance and slightly lower margins. Experience variant and other, as we call it, and which includes all variances relative to initial reserving assumptions, amounted to a negative $140 million in the quarter. This reflects total large NAPCAT losses of $570 million, whereof $537 million related to the Los Angeles wildfires. which is well above the Q1 seasonal budget of $360 million. PNC RE also booked large manmade claims of $140 million, and while we do not publish an explicit budget for large manmade claims, this amount is higher than what we would normally expect to see in an average quarter. The negative variance on large claims was partially offset by a positive prior year result. Nominal reserve releases in P&C RE amounted to slightly below $150 million in the quarter. This reflects the overall strength of our reserving position. And to the extent the uncertainty load is not required, this is where you see the benefits. In terms of the combined ratio, P&C REITs Q1 result of 86% is just above the less than 85% target we have for the year, but there is ample time to catch up. Moving on to corporate solutions, the Q1 CSM release of 196 million is in line with the average of the last quarters, indicating stable absolute margins. The decline compared to last year is driven by some IFRS transition impact in Q1 2024. Experience variance and other was positive at $36 million. This reflects a positive prior year reserving result, partially offset by higher than expected manmade claims, which amounted to a significant $150 million in the quarter. And as usual, an allowance for potential claims seasonality due to late reporting. Large NatCat claims of $60 million were driven by the LA wildfire loss of $50 million. Corporate Solutions' 88.4 Q1 combined ratio compares to our target of less than 91% for the full year, so clearly a good start. And finally, Life & Health RE, The Q1 CSM release of $432 million is brought in line with last year's Q1 number and slightly ahead of what we would expect in a normal quarter. Experience variance and other amounted to a negative $91 million, which largely reflects targeted assumption updates we undertook on onerous business and some volume updates. Overall claims experience, also mortality, was slightly positive. Life and Health 3's net income of $439 million, as Andreas already mentioned, is just above the pro-rata $400 million share of our $1.6 billion full-year target. So also here, a solid start. We benefited from strong investment results with the ROI of 4.4% well ahead of last year's 4.0%. A large part of the increase is due to the realized gain we achieved on the sale of our definitive stake, which was partially offset by targeted sales of fixed income securities. Recurring income remains healthy, standing at $1 billion in Q1. We also benefited from a favorable tax rate in the quarter of 14%, which was well below our normalized 21 to 23% expectation. We benefited from some legal entity restructuring effects, partially related to IPTQ. You should obviously not expect this to recur. A few words on capital. We estimate the group's SST ratio at 254% for Q1, broadly unchanged from where we ended the year. Additionally, we also announced this morning that we plan to cancel 18.7 million of surplus treasury shares, which are not eligible for dividends, out of 317.5 million total shares. As a result, upon completion by the end of Q2, the total number of shares will be 298.8 million, of which about 294.8 million shares outstanding, so eligible for dividends. and about 4 million treasury shares held primarily for share-based compensation plans. This exercise is just for good housekeeping as these treasury shares are clearly surplus to current needs. That's where I will leave it for now, and I'm happy to hand over to Thomas to kick off the Q&A.