Core Viewpoint - Swiss Re has demonstrated positive operating performance in recent quarters, but its valuation appears fair with limited upside potential at this time [1][6]. Financial Performance - Swiss Re's net income for H1 2024 was slightly above $2 billion, reflecting a 17% year-over-year increase, and the company is on track to exceed its annual net income goal of $3.6 billion for 2024, indicating at least 12.5% annual growth [3][4]. - The company's insurance revenue reached $22.5 billion in H1 2024, up by 3.2% year-over-year, primarily driven by the life & health segment [4]. - Investment income surged to $2.2 billion in H1 2024, an increase of 89% from the same period in 2023, attributed to higher returns on investments [4]. Market Conditions - The reinsurance industry has seen improved operating conditions since mid-2022 due to tighter funding conditions and increased pricing from higher catastrophe losses [3]. - Swiss Re's combined ratio in the P&C segment was 84.5% in H1 2024, better than its target of less than 87% for the year, indicating strong profitability [5]. Strategic Decisions - Swiss Re has decided to exit its digital insurance business iptiQ, which reported an annual loss of approximately $250 million in 2023, as it was unable to achieve profitability [5]. - The company aims for a net profit of about $1.5 billion in the life segment for 2024, which appears achievable based on H1 2024 performance [5]. Capitalization and Dividends - Swiss Re's capital ratio was approximately 300% at the end of 2023, indicating a strong capital position, which supports its dividend growth and sustainability [5]. - The annual dividend for 2023 was $6.80 per share, a 65% increase year-over-year, resulting in a dividend yield of about 5.4% [5]. Valuation - Swiss Re is currently trading at 10x earnings, in line with its historical average, but at a slight discount compared to peers trading at 11x earnings, suggesting limited upside potential after recent share price increases [6].

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|------------------------|-------------------------------------------------------------------|-------|-------|-------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Zurich, 22 August 2024 | Half-year 2024 Results Swiss Re investor and analyst presentation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Strong H1 2024 res ...

Financial Data and Key Metrics - The company reported a net income of $2.1 billion for the first half of 2024, putting it on track to achieve the full-year target of over $3.6 billion [3][9] - The P&C Re combined ratio for the first half was 84.5%, reflecting disciplined underwriting and low large NatCat losses [9] - The Life & Health Re business reported a net income of $883 million in the first half, driven by in-force margins and recurring investment income [12] - Corporate Solutions achieved a combined ratio of 88.7% for the first half, with a full-year target of below 93% [12] - The return on investments (ROI) for the first six months was 4.0%, with a reinvestment yield of 4.8% in Q2 [13] Business Line Performance - P&C Re increased loss assumptions by 11% on top of a 13% increase last year, reflecting a more prudent approach to underwriting [5] - Life & Health Re reinforced in-force mortality assumptions to account for potential medium-term pandemic impacts, increasing the resilience of its CSM (Contractual Service Margin) [7] - Corporate Solutions saw a strong underlying performance, with a benign manmade loss experience in the first half, offset by an allowance for potential claim seasonality later in the year [12] Market Performance - The P&C Re market experienced insured NatCat losses of $60 billion in the first half, with the majority related to smaller events assumed by the primary industry [9] - The company's own losses for large NatCat events came in below $100 million, significantly lower than the budgeted $600 million [10] - Premium volume growth in the July renewals was 7%, with Property & Specialty premiums growing by 11% [11] Strategic Direction and Industry Competition - The company is focused on enhancing the overall resilience of the Swiss Re Group, with a particular emphasis on disciplined underwriting and prudent initial loss assumptions [4][6] - The exit from iptiQ is proceeding as planned, with a write-down of all related intangibles to zero in the first half results [7] - The company is committed to growing the regular dividend based on underlying earnings and will return excess capital to shareholders if deployment opportunities are limited [8] Management Commentary on Operating Environment and Future Outlook - The company remains vigilant as it enters the hurricane season, which is the most active part of the year for natural catastrophes [3] - Management emphasized the importance of maintaining a strong capital position, with the SST ratio remaining above 300% at midyear [13] - The company is optimistic about achieving its full-year financial targets, despite the uncertainties in the operating environment [9][13] Other Important Information - The company introduced a reserving uncertainty allowance across all P&C businesses to enhance reserving strength [6] - The U.S. liability reserves were increased by around $650 million in the first half, with the majority allocated to the problematic years of 2014 to 2019 [11][17] - The company expects to add another $0.5 billion to reserves during the course of the year due to the uncertainty load on new business [24] Q&A Session Summary Question: Priorities and U.S. Liability Reserves - The CEO clarified that the current situation is different from 2019, with no need for drastic actions, but the company is addressing specific focus areas [15][16] - The CFO explained that the U.S. liability reserve additions were primarily for the years 2014 to 2019, with some allocations to earlier and later years [17] Question: NatCat Reserving and Liability Reserves - The CFO discussed the low NatCat losses in the first half and the decision to set aside $300 million in IBNR reserves for potential late-reported claims [21][22] - The CEO elaborated on the reserving philosophy introduced in CorSo, which has been extended to the P&C Re business to reduce volatility [23] Question: Life & Health Re Expenses and CSM Release - The CFO addressed the increase in other expenses in Q2, attributing it to comparability challenges with 2023, and expects a more normalized number in the second half [28] - The CSM release in Life & Health Re was higher in Q2, but the company expects it to normalize over time [28] Question: Life & Health Assumption Updates and CorSo Performance - The CFO explained that the negative experience variance in EMEA was due to specific geographies and not a worrying trend [31] - The CEO noted that CorSo had some NatCat losses but remains cautious as the hurricane season progresses [32] Question: NatCat Losses and U.S. Casualty Reserves - The CFO highlighted the disciplined underwriting in P&C Re, which has reduced exposure to high-frequency events and focused on tail risk [39] - The U.S. casualty reserve additions were driven by notifications from the primary industry about increased losses, particularly in umbrella casualty and commercial motor lines [39] Question: Reserve Additions and Combined Ratios - The CFO clarified that the majority of the $650 million reserve additions were IBNR, reinforcing the overall reserving position [40] - The company will provide sub-line combined ratios for the full year, with casualty lines seeing significant price increases [40] Question: Corporate Solutions and NatCat Exposure - The CFO noted that Corporate Solutions had minimal losses from U.S. tornadoes, with most losses coming from other regions [43] - The company expects a solid performance from Corporate Solutions in the second half, with a combined ratio likely below 93% [45]

Core Viewpoint - Swiss Re Ltd. has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly influenced by institutional investors [4][6]. - For Swiss Re, the recent upgrade reflects an improvement in the company's underlying business, likely leading to increased stock prices due to investor confidence [5][11]. Earnings Estimate Revisions - Swiss Re is projected to earn $3.42 per share for the fiscal year ending December 2024, marking a year-over-year increase of 23.5% [8]. - Over the past three months, the Zacks Consensus Estimate for Swiss Re has risen by 4.7%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Swiss Re to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock movement in the near term [11].

Core Viewpoint - Swiss Re is expected to rebound past the $32 level due to strong growth in premiums and net income, alongside a lower combined ratio in the Property & Casualty segment [1][2][19] Financial Performance - For Q1 2024, Swiss Re reported a combined ratio of 84.7%, an improvement from 85.8% in FY 2023, indicating better efficiency in managing losses and expenses relative to premiums collected [3][5] - The gross insurance revenue for Q1 2024 was USD 4,964 million, with net insurance revenue of USD 4,612 million after accounting for reinsurance premiums [4][5] - Net income for the Property & Casualty (P&C) Reinsurance segment reached USD 552 million in Q1 2024, up from USD 369 million in Q1 2023, reflecting strong demand for premium renewals despite price increases [6][7] Pricing and Demand - The P&C segment experienced a price increase of 12% during April 2024 renewals, indicating sustained demand for insurance products [6][10] - Although price growth has moderated from 19% in April 2023, the overall demand remains robust, contributing to strong net income performance [7][10] Balance Sheet and Valuation - The long-term debt to total assets ratio for the P&C Reinsurance segment is significantly lower than that of the Life & Health (L&H) Reinsurance segment, indicating a healthier balance sheet [8][9] - Swiss Re is trading at a price to book ratio lower than its competitor Zurich Insurance Group, while also achieving a higher return on equity [11][13] Future Outlook - Claims inflation in the motor industry is expected to ease, which may lead to lower personal motor premium rates, potentially moderating price increases across the Property & Casualty segment [16][17] - Despite potential short-term revenue growth pressures due to price moderation, the company is anticipated to continue experiencing healthy revenue growth driven by volume increases [18]

Financial Data and Key Metrics Changes - Swiss Re achieved a net income of $1.1 billion for Q1 2024, reflecting strong performance across all main businesses [2][12] - Insurance revenues for the group reached $11.7 billion, with an insurance service result of $1.4 billion [9] - The return on investments was 4% in Q1, driven by increased recurring income [9] Business Line Data and Key Metrics Changes - Property & Casualty Reinsurance reported a net income of $552 million, with insurance revenue of $5 billion and a combined ratio of 84.7% [3] - Life & Health Reinsurance reported a net income of $412 million, with insurance revenue of $4.8 billion and a target net income of approximately $1.5 billion for 2024 [4][24] - Corporate Solutions achieved a net income of $194 million, with insurance revenue of $1.8 billion and a combined ratio of 89.9% [5][11] Market Data and Key Metrics Changes - P&C Re achieved a 12% price increase in the April 2024 renewals, with a treaty premium volume of $2.5 billion, representing a 6% volume increase [10] - The company noted a significant increase in industry loss estimates for summer storms in Italy, adjusting from $3.3 billion to $6 billion [18] Company Strategy and Development Direction - Swiss Re plans to withdraw from the iptiQ business due to a changed market environment, focusing on core activities with better growth prospects [12][67] - The company aims to achieve a Group net income of more than $3.6 billion for 2024, reflecting a 20% increase from the previous year's target [78] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial targets despite challenges, emphasizing the importance of disciplined underwriting and effective management of operating expenses [2][12] - The company anticipates continued strong demand for reinsurance, with adequate supply but not excessive, maintaining pricing discipline [27][30] Other Important Information - Swiss Re transitioned to IFRS reporting from U.S. GAAP as of January 1, 2024, affecting comparability with prior periods [9] - The company expects to manage restructuring charges related to iptiQ without significant negative impact on overall earnings [88][110] Q&A Session Summary Question: Estimate for the Baltimore Bridge loss and vulnerabilities - The gross loss for Swiss Re from the Baltimore Bridge incident was approximately $100 million, with a net loss of about $75 million [16][80] Question: Changes in iptiQ business and future plans - The decision to withdraw from iptiQ was based on lower than expected demand for its capabilities, with plans to manage the exit in a way that maximizes value [67][81] Question: Pricing environment and future expectations - Management noted that while some areas may see price stabilization, there remains room for price increases in property and nat cat reinsurance [30][43] Question: Investment return and strategy - The 4% investment return was primarily driven by a strong fixed income portfolio, with a focus on safe assets [122] Question: Overall loss booked at iptiQ - The expected loss for iptiQ in 2023 was approximately $250 million, with a smaller loss anticipated for 2024 as the business is restructured [88][86]

| --- | --- | |-----------------------------------|-------------------------------| | | | | | | | | | | Additional information on Q1 2024 | | | | First Quarter 2024 Results 13 | Financial statements Q1 2024 Income statement | --- | --- | --- | --- | --- | --- | --- | |-----------------------------------------------------------------|--------|--------|-----------------------|-------------|---------------|---------------| | USD m | P&C Re | L&H Re | Corporate Solutions | Group items | Consolidation | Total Q1 ...

Poca Wander Stock Swiss RE (OTCPK:SSREF) offers a high-dividend yield that is sustainable over the long term and its current valuation seems to be undemanding. As I’ve covered in previous articles, Swiss Re’s income appeal is one of its main attractive factors, due to a combination of a high-dividend yield and a sustainable dividend over the long term. Given that Swiss Re has very recently reported its annual results, in this article I analyze its most recent financial performance and update its investm ...

Swiss Re AG (OTCPK:SSREY) FY2023 Earnings Conference Call February 16, 2024 8:00 AM ET Company Participants Christian Mumenthaler - Group Chief Executive Officer John Dacey - Group Chief Financial Officer Thomas Bohun - Head of Investor Relations Conference Call Participants Andrew Ritchie - Autonomous Kamran Hossain - JPMorgan Vinit Malhotra - Mediobanca Will Hardcastle - UBS Ivan Bokhmat - Barclays Freya Kong - Bank of America Roland Pfaender - ODDO BHF Darius Satkauskas - Keefe, Bruyette & Woods Operato ...

Swiss Re CEO Christian Mumenthaler gestures during a session of the World Economic Forum (WEF) annual meeting in Davos on January 18, 2024.Insurance giant Swiss Re on Friday reported a sharp upswing in full-year profit, benefitting from what it described as an attractive market environment after a "batch of bad years."The Zurich-headquartered company posted full-year net profit of $3.2 billion, in line with expectations according to an LSEG-compiled consensus. It marked a nearly 580% increase when compared ...