Swiss Re AG Q4 2024 Earnings Call Transcript

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

Question: Kamran Hossain - J.P. Morgan Cazenove - Analyst : Good afternoon, everyone. Just wanted to start as well with John, I've known you for some time in various roles across Swiss Re, I'd just like to kind of echo the thanks from our side. It's definitely probably not been the easiest ride in the last few years since 2019, and you dealt with kind of all of our difficult questions, challenges and kind of analysts peculiarities with growth, (inaudible). We'll definitely miss our interactions the most, definitely. And I'm pleased that you're leaving the business on a high point too. So, thanks again. Two questions from me. The first one is just on the, I guess, on the target for 2025. When we sat there in London at the IR Day in mid-December, you could see those supreme confidence on the stage from every member of the management that the $4.4 billion is a number that's got buffers built in that, you're certain you will achieve it, there is a really high degree of confidence. Did the LA wildfires to any extent, shaped your confidence in delivering that $4.4 billion plus 30% is kind of one-third of the cat budget for the year. So just interested in kind of whether that changes your confidence in achieving things or not? Or you're still kind of have that rock solid kind of belief that you can hit that? And the second question is just around the cat budget. I think, John, you alluded to this, that you've done a lot of work to avoid things like secondary perils in the business. And if I look at the experience of yourself on the cat budget this year, it's well below what you thought it was going to be at the beginning of the year, and other peers have maybe not been so lucky. So just is there anything that you can see that's been a major driver there? Or is it simply just secondary perils and just stepping back from some things that you just realized you shouldn't be covering? Thank you.

Question: Andrew Baker - Goldman Sachs - Analyst : Great, thank you for taking my questions. The first one, just on the Q4 specific Life and Health Reinsurance service results. Are you able to give a bit more color on what books contributed to the negative experience variances and whether this was primarily the EMEA health, smaller Asia portfolios where you've now rebased your assumptions? Or are there any other portfolios where you're seeing the negative experience variances coming through the ISR? And then secondly, on the California wildfire loss estimate. Do you have just give a bit more color on your sort of process to come up with that number. Was that done bottom up? Or is that top down based on your market share? And then also, are you able to provide any split between P&C Re and Corporate Solutions if that's appropriate? Thank you.

Question: Ivan Bokhmat - Barclays Capital - Analyst : Hi, good afternoon. I'd also like to thank John for the interactions over the past, almost a decade. So questions I have is the first one would be on the capital generation and maybe the change in the SST ratio has clearly been a little more pronounced than the IFRS impact. I'm just thinking into 2025, as we think about how this ratio would go, is there any reason to expect that the capital generation will differ from what the $4.4 billion earnings target assumes, which would be roughly an equivalent of mid- to high 20s point of improvement in the ratio. That's question one. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 1:00PM, SRENH.S - Q4 2024 Swiss Re AG Earnings Call And question two, just looking at the renewals, there doesn't seem to be quite substantial growth in property. I was just wondering if you can talk about that. And how does that mix change affect any of your profitability outlook? Also a little bit surprising to see that casualty wasn't done more. So any comments on renewals will be very welcome. Thank you.

Question: Iain Pearce - Exane BNP Paribas - Analyst : And just to reiterate the comments, thanks for your help over the years, John, you've been a great asset and a great help to on the sell side. Just two, hopefully, quite quick ones. The first one, if you could just provide some detail on the comments around the renewals of the negative impact from risk-adjusted pricing been offset by discounts. Can you just put some numbers around that on the combined ratio that would be very useful. . And then the second one, if you could just provide a little bit more color on any of the learnings you had from the review that was conducted in Life and Health Re, particularly around sort of adjustments have been made to expectations by line of business. You mentioned some stuff in US mortality. Any more color there would be really useful. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 1:00PM, SRENH.S - Q4 2024 Swiss Re AG Earnings Call

Question: Vinit Malhotra - Mediobanca - Analyst : Thank you. So for me, the question would really be a follow-up on the target really. So on the Life side, the CSM is about $1 billion, lower than the $18.5 billion guided to at the management title. So I'm just curious, I mean, it seems like a bit more than what the reviews led to. And just get should we be expecting a bit more amortization rate? Or how do you think we should still have the same net income number? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 1:00PM, SRENH.S - Q4 2024 Swiss Re AG Earnings Call And then again, on the non-life side. John, you mentioned the pricing venture benefits that I think I listed you to say that you're assuming what happened with -- so you're more so happy about the target. But the combined ratio is still in the same ballpark. Is there something you could clarify a bit more on the pricing assumptions you might assume or in the combined ratio target? That's my two questions. Thank you.

Question: Michael Huttner - Berenberg Bank - Analyst : Thank you very much. I had two. The first one is on investment income and the other one is on the (inaudible). The investment income, I was trying to compare the slides and it's -- but the feeling I get is the reinvestment yield is better. You highlighted the better investment income, the $500 million figure. The feeling I have is that whatever the shift in portfolio or whatever, is that there's actually more money coming through than you might have thought back in December. So -- maybe you can help on this. I don't know if I probably got it wrong. And then you mentioned (inaudible) print. Now I'm kind of nearing the end of my math, but I'm interested in what that means. Is it your building your plan for the next like 10 years or 5 years or -- the reason I ask is it is relevant to the way I build models, we think, well, if I were a management when do I want to peak. So that's the reason I ask. And of course, the underlying number is always if you were to add back at $2.4 billion charge or whatever, you'd literally get a very nice number indeed for the group as well. And I know last year was a bit lower than that cat, but it would still be incredibly attractive and hopefully, basically, I want to know when you hit it, that's it.

Question: Shanti Kang - Bank of America - Analyst : Hi, thank you for taking my questions and congratulations on your results today. So I guess my first question is just on [CorSo]. I'm just curious to know what you think the sort of normalized run rate is for [CorSo] going forward. The 89.7% combined ratio is obviously very strong. Do you think that's sustainable? And how should we think about that against the 2025 target? And then my second question is just on the overall casualty book. And given that you've made some pruning and adjustments on the reserving side, where do you see that kind of troughing out? And is there a level that you wouldn't wish to go below for casualty risk exposure? That's all. Thank you.

Question: Faizan Lakhani - HSBC - Analyst : Hi there, thank you for taking my questions and reiterating what everyone said, John congratulations on a great career. I had a conversation earlier with your IR team about the combined ratio and the difference between the Q4 underlying versus the full year. There seems to be quite a big deviation, and I understand there are some true-ups and one-offs in Q4, but maybe you could just provide some greater clarity on how to think about the quarterly versus full year. And in part, if you've allowed for the $400 million, $500 million new business prudence, at the full year? My second question is on the Life & Health Re new business formation. It seems to be a little bit light in Q4 versus the first nine months. I understand it can be quite lumpy. I just want to understand if there's anything in there to think about and what the outlook is for 2025 on the new business? Thank you.

Question: Darius Satkauskas - Keefe, Bruyette & Woods - Analyst : Hi there. Thank you for taking my questions. John, thank you for the help over the years. So just to come back to the Life & Health CSM reduction. So your assumptions may now be more conservative, but you also have $900 million or so less Life and Health CSM than you expected to have at the Capital Markets Day, which essentially allows absorption of further assumption changes before it hits the P&L. So how comfortable are you with the Life & Health assumptions now or should we think that the earnings are a bit more vulnerable to any further assumption review that you may do? And the second question, could you tell us what amount of the CSM stock reduction of that $900 million related to the US mortality? And what was the number in the experience in the P&L? Thank you.

Question: Ivan Bokhmat - Barclays Capital - Analyst : Hi, I thank you very much. Two small ones for me. John, I think on the media call, you mentioned the unusual accumulation of losses in Aviation. So I was just wondering if you could maybe talk about how material this could be for Swiss Re? And maybe on a related topic here, could you remind us of the reserves that you still carry around the Russia-Ukraine conflict because I assume a lot of it also relates to aviation. And then there's a second question, actually a bit more technical. We've now had four quarters of net insurance revenues in P&C Re business and Q4 looks weakest of the years. If we think about seasonality for '25 and onwards, is this the right kind of ratio of how premiums get booked through the quarters of the year?