Swiss Re AG Q3 2024 Earnings Call Transcript

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

Question: Kamran Hossain - JPMorgan - Analyst : It's Kamran from JPMorgan. The first question I wanted to ask is just -- how much should we read into the nine months result when we try to think about next year, so for 2025. I know you can give us much better steer in a month or so's time, but it looks like you've had really good results in P&C. Really maybe some good luck when you net out the reserve release on Net cat. CorSo is running better and Life is also going pretty strong. How much should we read into nine months? Or should -- when we think about the guidance for next year, where that's going to start, should we use maybe where you start at the beginning of the year on guidance at the right place. The second question is just on the SST change. Just really interested in what the motivation to change the methodology was. Is this reliability resilience? Is this just a part of a wider assumptions review across the group just some kind of what did that -- kind of what drove that change in methodology and a decision to go for it? Thank you.

Question: William Hardcastle - UBS - Analyst : First of all, just coming to the reserve addition in the liability. How much of that are you able to say was driven by increasing the percentile versus some just naturally assumed higher ultimate outcome? And I'm just trying to understand if it's a percentage uplift. Does this get reflected in SST or not? I'm not quite sure on that. And then maybe secondly, if you could give a rough indication, I know there's a lot of moving parts of where SST would be currently, that would be helpful. Just trying to understand the inclusive of the reserve implications but also reflecting quite wild moves in the capital market, that would be great.

Question: Ivan Bokhmat - Barclays Capital - Analyst : I mean, my first question would be on reserving. I think your -- the language you use around the 90s percentile implies that there is a range where you'd like to operate in. I was wondering if you could share some color on that. And same about the accelerating the achievement of the goal. I suppose this implies that there maybe room for some further strengthening, but you have ruled out any negative earnings impact. Does that mean that you may be taking some charges opportunistically, let's say, if you're outperforming versus budget? And the second question, perhaps related to the casualty debate, but Swiss Re has been driving the discussion about social inflation emerging in geographies outside of the US. So I'm just wondering how -- to what extent is that reflected in your reserves? And to what extent is that reflected in pricing for the casualty business into 2025?

Question: Andrew Baker - Goldman Sachs - Analyst : The first one is just on the SST ratio. So does a lower absolute SST ratio, but with the lower volatility that you've highlighted actually change your view of deployable capital in the group? And I guess, was there any thought in bringing down or narrowing your target range where you're going through that exercise? And then secondly, can you just help me so the greater than $3.6 billion, 2024 net income target. What was the adverse drag that you'd assume from casualty reserving in that sort of 2024 outlook?

Question: James Shuck - Citigroup - Analyst : So my two questions. So firstly, I just wanted to make sure -- the new business uncertainty load. So is that uncertainty load at the 90th percentile as well? So ideally, you're flushing through the whole book at that level? And kind of connected with that, as you expect the 19% also runoff at this estimate, should we factor in prior year reserve development because some of your peers reserve around that level, we think. And we're expecting kind of 5 points of reserve releases. So at some point, presumably, if everything goes to plan, that's the kind of number that we should ink in?That's my first question. And then secondly, the combined ratio in P&C Re, it looks to be like it's 79% to 80% roughly in -- at the nine-month stage on a normalized basis. Could you just confirm to me that that's how you see it as well?

Question: Michael Huttner - Berenberg - Analyst : I've got one really cheeky question and one kind of boring on. The cheeky question is you get a bonus this year. And the -- because if I remember correctly, you guys now target net profit and there's no excuses, but it's a question. And I'm sorry, you probably think I'm cutting you off my Christmas card list. And then the other question is more boring. I'm trying to work out what the kind of run rate profit and I'm getting a lot of different numbers, but if I use the 80% you just mentioned and the $15 billion revenues and in P&C Re, and kind of add back that difference to the 92.8% combined ratio. I get to roughly $3.8 billion for nine months, which would annualize at just over $5 billion. Is this kind of a rough number one can think of.

Question: Derald Goh - RBC Capital Markets - Analyst : The first question I have is from Life & Health Re. So you've had three quarters of negative experience variance now seems to be getting worse. Are you comfortable with the state of the life and health reserves? Or do you feel like this is something that you'll be addressing as well going forward? And then secondly, so you spoke about this $0.5 billion new business uncertainty low post tax for this year. Can you say how much you've added through nine months and whether this was or might be compromised by the reserve review or if you get 4Q cats that you just have to secure that $3 billion target and maybe not at as much as the $0.5 billion for the year.

Question: Faizan Lakhani - HSBC - Analyst : I'm just trying to understand and tie back all the information around 2025 and forward. As one of the questions sort of concluded the earnings power is much stronger than your $3.6 billion and the first nine months shows that. Would it be fair to say that you're more steering towards a cross-cycle ROE? And would it be I guess, in terms of philosophy, are you willing to show strong experience during the hard market and the benign sort of claims periods? Second question is on the SST. You resolved the issue in terms of liability, your solvency sensitivity has come down and your solvency is still well above your target range. What's stopping you from returning further capital back at the full year?

Question: Simon F÷ssmeier - Bank Vontobel AG - Analyst : First question is on the Net Cat exposure. How much do you see to third-party capital investors via alternative capital partners. I believe you provided the number before and it was somewhere between 15% to 20%. I'm just wondering where it is now. My second question, and I know it's a bit early to comment, but do you have any high-level comments what the impact of the Trump presidency could mean on your business?

Question: Simon F÷ssmeier - Bank Vontobel AG - Analyst : It refers to any potential impact that the Trump presidency could have on your business?

Question: Shanti Kang - Bank of America - Analyst : It was actually just around the landscape in US liability lines. And I'm just interested to hear what you think needs to happen in the industry maybe from a rate perspective, they're clearly inadequate at the moment. So I was just wondering what sort of increases need to take place to accommodate for these ultimate losses or to find a sort of equilibrium or if maybe it needs to be a legislative change to address the issue that seems to be sort of snowballing -- just to get your thoughts.

Question: Vinit Malhotra - Mediobanca - Analyst : A lot of my questions have been addressed, but I'll ask a few. Just on the top line, the P&C Re, I mean, is it a fair understanding that you've been slowing down the premium growth? Because you see the reason I ask is we don't get to see the comparables. So we -- it seems to me that where the nine months is trending the $15 billion is not leaving much for growth versus last year, unless 4Q has some acceleration to be expected. So I'm just curious. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 14, 2024 / 1:00PM, SRENH.S - Q3 2024 Swiss Re AG Earnings Call And the reason also is that -- it seems from the commentary that the numbers, which were so strong, which led to this opportunistic reserving actually, not just accidentally strong but actually very strong. So just curious on the topline and the premium growth and the numbers. And just some very -- very, very quick quality questions. Life refinancing costs, for example, look to have increased a lot in 3Q standalone. Is there something that I missed here, probably. So just a very basic question here for that.

Question: Iain Pearce - BNP Paribas Exane - Analyst : Just one left for Eddy. It was just about the US mortality experience. You sort of flying small positives in US mortality continuing -- if you just give us a bit more sort of detail on what the drivers of that positive experience is, that would be useful. Obviously, been an area of the market that's been quite a lot of focus. So just a bit more detail on that would be useful.

Question: Michael Huttner - Berenberg - Analyst : Is really, really brief. I think you said that the Echo from your action last week was positive also externally. And I just wondered whether that means you're the brokers you deal with or the clients you deal with in -- on the reinsurance side, I'm saying, clearly, you set your house in order, and we can now give you even more business, you're more even more looking like Munich Re than before.