Swiss Re AG Q2 2024 Earnings Call Transcript

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

Question: Kamran Hossain - JPMorgan - Analyst : Two questions for me. The first one is Andreas. I guess, I just wanted to ask another way about priorities. I guess, when you took over at CorSo five years or so ago, you took relatively dramatic action. That suggests to me that actually kind of given that you've been at the group for some time, REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 22, 2024 / 12:00PM, SRENH.S - Q2 2024 Swiss Re AG Earnings Call you've seen everything that's going on. You don't think there's anything major to do or maybe do you need a little bit more work to do to get to that conclusion? The second question is just on the US liability additions. I think you mentioned IBNR related to Property & Specialty, but you didn't mention that about US liability. Was this newer years or something else or kind of pre-'20? Thank you.

Question: Will Hardcastle - UBS - Analyst : Hi, thanks for taking the questions. Kam actually asked most of it. In terms of just wondering about the new nat cat sort of deferral benefit to later in the year, effectively adding a bit of seasonality, is that something you'll look to do going forward, sort of store a bit back heading into Q3, Q4, if it's been benign? And it's just go slightly at it from a slightly different angle, Andreas. There's been noise down in the results for a number of years. I mean, it's good news is coming through, and you're still printing excellent numbers. But these liability reserves have been more than a niggle now for a sustained period. Just understanding what role you played with the executive committee in the new reserve setting with extra prudence? And I guess, we've got a big balance sheet here. Is it a possibility that you look at a cleanup exercise in order to make sure, as you put it, your earnings are far more resilient going forward or is this what we're seeing already and you feel we're there now? Thank you.

Question: James Shuck - CITI - Analyst : Yeah. Good afternoon, everybody. Welcome, Andreas. My first question is on Life & Health Re. I just -- it's quite a specific question really, but I noticed that the 2Q other expenses line jumped up quite significantly from negative $86 million in Q1 to negative $256 million in Q2. The comparisons that we have in kind of the full year last year was negative $308 million, so we're tracking well above that. I know you previously guided for the sum of other income expenses, financing, and tax to be around $1 billion for full-year '24. It seems to be about $650 million at 1H. So we seem to be tracking well ahead of that. But if you can just give me a little bit more insight into what's happening there, kind of 1H and expectations for 2H? And I guess kind of linked to that, if I can squeeze this in. The CSM release in Life & Health Re was a lot higher in Q2. It's $900 million for 1H. So I think previously you guided to $1.5 billion for full year, so again, we're tracking well ahead of that. Maybe one thing is being moved from one side to the other, but if you could clarify. The next question really was really just to drill down a bit more, and I appreciate you want some time and the solvency position is always something under debate. But I think, John, you kind of suggested that you're going to manage the SST to 200% to 225% -- sorry, 250% over the medium term. I think you're kind of over 300% at this point, you just confirmed. There's a different debate to be had about the flow versus the stock even if you kind of improve the dividend cover on the flow, you still got plenty of room to grow no matter what stage of the cycle we're kind of at really? So really, I'm just looking for some insight into potential uses of capital where you can actually fund growth if the cycle behaves as we think it will from this point because it's very difficult to see how you deploy that stock of excess capital and kind of what would be most useful as a timeframe really for kind of reviewing that. Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 22, 2024 / 12:00PM, SRENH.S - Q2 2024 Swiss Re AG Earnings Call

Question: Derald Goh - RBC Capital Markets (Canada) - Analyst : Hey, afternoon, everyone. First question is on life and health assumption updates. So I hear what you said about having reinforced your assumptions for US mortality. I just wanted to check with because we've seen two quarters now of negative experience variance in EMEA, were those assumptions not reinforced when you did the IFRS 17 transition or is it just a case of you building on more resilience on the balance sheet as is the new retro deal as well? Maybe you could also share a bit more details beyond any retro view. And my second question is on CorSo. So I hear what you're saying that there might be some more claims seasonality, but it looks as though we had a few quarters of favorable man-made. So is there an element of improvement in your attritional that you're not willing to recognize us yet? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 22, 2024 / 12:00PM, SRENH.S - Q2 2024 Swiss Re AG Earnings Call And also it seems as the expense leverage is coming through. So really what is the true underlying run rate for CorSo's combined ratio against the sub [92%] target? Thank you.

Question: Faizan Lakhani - HSBC - Analyst : Hi there. Thanks to my questions. The first one is, there seems a consistent theme in your press release and what you said earlier about a delivery of consistent results and building resilience. I guess on that theme, how much of the positive or better-than-expected results are you willing to let flow through to the bottom line? I guess, in part on the same note, if we were to get a budgeted loss in H2, would you unwind the nat cat prudency put in H1? Second question is on the P&C Re experience between Q2 versus Q1. Obviously, very strong kind of results, but I can see the CSM is lower for Q2 versus Q1 and even you do on a normalized basis appears to be operating slightly worse. Maybe you could just explain why that might be and how we should think about the earn through of the prudent load on the initial loss picks going forward? Thank you.

Question: Faizan Lakhani - HSBC - Analyst : Yeah. I guess the CSM for Q2, specifically on P&C Re is lower than the Q1 CSM release. I'm assuming that's because the experience isn't quite as good in Q2. So I just want to understand what's going on there and how the experience differs between the two quarters.

Question: Faizan Lakhani - HSBC - Analyst : Yes. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 22, 2024 / 12:00PM, SRENH.S - Q2 2024 Swiss Re AG Earnings Call

Question: Faizan Lakhani - HSBC - Analyst : That's helpful. Thank you.

Question: Vinit Malhotra - Mediobanca - Analyst : Yeah. Good afternoon, and welcome, Andreas. Many of my questions have been addressed. I just got maybe one on nat cat, please. So even if I go back last year second quarter, there had been a surprise in the lower nat cat relative to your other reinsurance peers. And at that time, there was this discussion around how your underwriting has helped. Now, when I see this quarter for 2Q numbers, a bit below $100 million. And then I hear the comment about the $300 million reserves being certified. I'm just curious, which of these two scenarios is at play here? Scenario A, that your underwriting was quite selective about secondary perils. And hence, you've recorded much lower cat losses and peer group. Or Scenario B, that you have recorded less than $100 million, but also you recorded this additional $300 million because these could be probably losses which do need to be there. So I'm just curious about this quite stark difference between the peer group and yourselves on nat cat loss in Q2? And just on the similar theme if I -- because I might have reduced the second question. The US casualty, again, the higher IBNRs are welcome. I just wanted to know was there any external trigger you noticed? Or you just thought because you had a good period of time in any loss or cat season. So it's an opportunistic reserving probably. So just curious on the logic behind the US casualty. Thank you.

Question: Darius Satkauskas - Keefe, Bruyette & Woods Limited - Analyst : Hi. Two questions please. Andreas, are you able to disclose how much of the $650 million in reserve additions were IBNR versus case? And then also, you used to show this helpful slide where you would disclose P&C Re business lines combined ratios that you recently dropped. Would you be able to disclose what the casualty combined ratio was in the first half compared to property, for instance? And then lastly, when should we expect to hear about the outcome of your assessment, Andreas.

Question: Vinit Malhotra - Mediobanca - Analyst : I'm sorry, I didn't mean to come back too soon. Just on the corporate solutions, and I'll add one follow-up, please. There was no mention of the US tornadoes, the severe connected storms, which were quite a topic in the industry. I'm quite surprised like corporate solutions didn't have any problems there or any losses there. And also in the same line, the 88.7% goal of 1H with benign man-made. I understand there might be seasonality. But was there any other reason to expect something much worse in the second half from this business?