Swiss Re AG Q2 2021 Earnings Call (Q&A) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: William Fraser Hardcastle - UBS Investment Bank, Research Division - Analyst : Two questions. The first 1 is I guess a comparator this week suggested it would be looking to increase its catastrophe budget expectations in light of recent track record. I guess in that regard, are you still confident that your catastrophe budget is struck sufficiently robustly? Or could this be something that Swiss Re looks at as well? And then the second one is, within prior year development, it's a very small number. It's nice to see that the adverse development on casualty lines has come down a long way. Is it possible to break this out perhaps in quantum between the adverse development on North America liability and cyber versus that favorable workers' compensation development? And what drove it -- the adverse? Is it just specific cases? Or are there any assumption changes within that?

Question: Kamran Hossain - RBC Capital Markets, Research Division - Analyst : The first question is just following on from Will's, one about cat budget. Could you just talk a bit about how you actually calculate the cat budget. I guess based on my understanding and conversations with other kind of companies and people in the sector, a lot of cat budgets are calculated REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2021 / 12:00PM, SRENH.S - Q2 2021 Swiss Re AG Earnings Call (Q&A) on a backward dating basis. So it's on historical data kind of overlaid onto your portfolio. And the issues that these models have is that they don't tend to factor in changing climate. So just a few words on kind of how you calculate the cat budget and kind of factor climate change, which seems like it is happening into models. And the second question is just on the, I guess, the level of prudence in your COVID reserves. Obviously, the kind of 43% IBNR reflects kind of event cancellation and mortality losses. But if I look at the kind of business interruption block, it looks like you've got $1 billion plus of IBNR for events that really happened more than a year ago. So just interested in how those reserves have moved year-on-year and whether actually you expect to get more clarity whether these claims will develop or not in the coming quarters?