Swiss Re AG

Good morning or good afternoon. Welcome to Swiss Re's Q1 2026 results conference call and live webcast. 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 I, Group CFO Anders Malmström, walks you through the details of our first quarter results. As usual, I would like to start with some brief remarks. We've made a strong start to 2026, delivering a net income of $1.5 billion in the first quarter. This represents one-third of our full-year net income target of $4.5 billion, and positions as well for the remainder of the year. The annualized ROE, for the quarter amounted to 24%. All business units contributed to this result, also helped by a good investment contribution. Both P&C businesses delivered strong underwriting results supported by a low level of large losses in the quarter and excellent underlying profitability. This allowed us to post a strong overall result while also strengthening the balance sheet. Turning to the market environment and P&C reinsurance renewals. The April renewals confirmed the continuation of the trends observed in January. Our focus on prioritizing portfolio quality over volume remained unchanged. This is what is required by cycle management. Competition has intensified, especially in non-proportional NAPCAT. Here, the nominal price is down five single digits for our overall NAPCAT portfolio through the year-to-date renewals. Casualty and specialty lines show a more balanced overall price development picture. Within casualty, liability experienced notable rate increases, though we remain cautious with motor also seeing rate improvements. Overall, we have achieved a nominal price increase in the mid-single-digit range for our casualty portfolio year-to-date. Within specialty, competition has picked up. However, nominal rates rose across the majority of sublines. As a result, the nominal price is slightly up for our overall specialty portfolios. Through the January and April renewals, we have successfully defended our market position and relevance, and importantly, maintained underwriting discipline and terms and conditions. That's key for us. Our client franchise continues to be in an excellent position. Specifically, in the April renewals, we saw stable demand on panels in Japan. In the U.S., Nationwide clients increased demand and we participated. In certain markets, an influx of new capacity left with materially lower advocacy, and we decided to reduce exposures. India agriculture is an example where such actions can have a disproportionate impact on volumes. Some new aggregate covers were placed. Here, we maintain our cautious stance. What does that mean in terms of the overall renewal outcome? The April renewals represent a relatively modest portion of our overall business at 12%. Combined with the January renewals, overall nominal pricing has been flat, despite the noted pressures in property net tax. When taking into account prudent increases in loss assumptions, the net price change stands at a negative 4.4%, Overall volume is down slightly at minus 2%, primarily driven by the nominal property rate declines and by the stated reduction in agricultural business. Overall, the portfolio quality and outcome of the renewals remain supportive of our 2026 financial targets. This also means that our renewals have progressed broadly as we expected. And we set the targets at the end of last year and communicated it also to you. We expected a more challenging 2026 and this is clearly what is happening. This is simply the nature of our industry and therefore you will continue to see us applying discipline and cycle management. Subject to loss event development, we expect similar trends into June and July. This means high demand, but continued pricing pressure. Accordingly, at this point, you should not expect us to ride higher volumes. We will remain focused on defending the overall price adequacy and quality of our portfolio. Now turning to life and health. The first quarter has provided encouraging signs that the actions taken in 2025 are delivering the intended outcome. The business is now on a very strong footing, let's say on a stronger footing, as evidenced by clean earnings delivery in the quarter, supported by a positive experience variance for the first time, by the way, since our IFRS transition. This supports our confidence in achieving the 1.5 and 1.7 billion US dollars net income target for 2026. Let me also touch on new business generation across the group. The main driver of the year-on-year decline is the impact of the January renewals in P&C RE. In addition, the contribution from Life & Health RE in the first quarter was more muted, which reflects the inherent variability of underlying transaction activity throughout the year. By contrast, new business CSM in corporate solutions remained broadly stable year-on-year, which is a very solid outcome in the current environment. COSO benefited from more favorable reinsurance conditions in the external market, as well as the inclusion of the P&C REITs credit and surety business. This partially offset the risk-adjusted rate decrease that we saw in Q1, and which amounted to around minus 5% for our overall portfolios. While Costco is clearly also having to manage downward price pressure, in particular in poverty, we continue to see underlying growth in our strategic assets, as we call them, and focus areas, including international insurance programs and alternative risk transfer solutions. Looking ahead, our goals remain. Delivering on our financial targets and the group's overall resilience. Against the backdrop of geopolitical turbulence and an increasingly challenging market environment, our P&C businesses will remain focused on disciplined underwriting. In this context, we expect Life & Health Reinsurance to make a growing contribution going forward. At the same time, we remain focused on cost efficiency. Now with that, I'll hand over to Anders for a closer look at the financial details of our financial first quarter results. Hand it over to you.

Thank you, Andreas, and good morning or good afternoon to everyone on the call. Andreas has taken you through the highlights of our overall positive first quarter. Let me add a few further details before we move to the Q&A. T&C Reinsurance reported an insurance service result of almost 800 million US dollars, well above the prior year level. The increase was mainly attributable to favorable experience variance, which captures deviations from initial reserving assumptions. In the quarter, we saw positive experience variance related to both current and past services. Just as a reminder, under IFRS, this broadly corresponds to what we previously referred to as current year and prior year development. The positive experience related to current services was around $100 million, primarily reflecting large NatCat losses coming in $276 million below expectations, partially offset by reserve additions of slightly more than $100 million in IBNR form to cover potential late attrition losses. Andreas mentioned that we strengthened the resilience of the balance sheet. In the quarter, we achieved a positive experience of around $130 million related to past services. This includes around $450 million of positive reserve developments. In light of geopolitical uncertainties associated with the ongoing Middle East conflict, we decided to retain most of these benefits and established around 400 million US dollars of IBNR reserves to address potential inflationary impact, of which 350 million US dollars in P&C RE. On the back of these elements, P&C RE reported a strong combined ratio of 79.5% in the first quarter, comfortably within its target of below than 85% for the year. Let me also briefly touch on new business CSM before moving to corporate solutions. New business CSM amounted to 1 billion US dollars compared with 1.4 billion dollars in the prior year period. As we indicated with our full year results in February, we expected the January renewals to translate into a roughly three percentage point increase in the nominal combined ratio compared to the up for renewal portfolio. The year on year reduction in new business CSM of around 350 million US dollars is largely consistent with that expectation. Turning to corporate solutions. The business unit delivered a strong combined ratio of 85.1%. The related insurance service result was $286 million supported by a CSM release of $192 million, broadly in line with last year. Experience variance and other was positive at $146 million, primarily driven by a favorable experience related to past services across all lines of business. In addition, corporate solutions benefited from lower-than-expected large NASCAP and man-made losses, largely offset by the usual IBNR allowance for potential claims seasonality due to late reporting. New business CSM remained broadly stable, supported by resilient new business generation and the inclusion of about $40 million from P&C REIT credit and surety business. partly offset by a more challenging property pricing environment. As a reminder, net new business CSM is subject to seasonality, with the majority of the reinsurance program incepting in the first quarter, while assumed business is written more evenly throughout the year. Turning to Life and Health Reads. where we see the impact of the actions taken in 2025 coming through. The net income of 491 million U.S. dollars reflect underwriting margins from the large in-force book, favorable experience, and a solid investment contribution. The insurance service result increased to $547 million and includes a CSM release of $379 million, corresponding to an annualized release rate of around 9%, in line with our full year guidance. The result was also supported by positive experience variance of $60 million, primarily from the US mortality portfolio. A few words on the top line. Group insurance revenue is down $371 million versus last year, primarily due to P&C RE, where the overall renewals outcome and reduced seed and volume updates represent the main drivers of P&C RE's 8.5% decline. On a net basis, P&C RE's revenues are down by a more modest 5.7%. as we lowered our external retrocession in NatCat. Further, IPTQ revenues contained in group items have reduced by $192 million due to our withdrawal progress on that business. Like Intel 3, revenues are up by $240 million, mainly due to FX tailwinds. while corporate solutions revenues are down $77 million. Excluding the impact of the discontinued Irish MedEx business, Corsos revenues are up by around $100 million, which includes an FX tailwind. We also benefited from strong investment results with an ROI of 4.6%, supported by disposal gains of 159 million US dollars, primarily from real estate sales, while recurring income remained healthy at 1 billion US dollars. Lastly on capital, we continue to maintain a strong capital position with the group SSE ratio estimated at 252% as of 1st of April, above our target range. With that, I will leave it here and hand over to Thomas to open the Q&A.