Swiss Re : 2023 FULL-YEAR Annual Report – Financial Statements

Financial Statements

This document is an extract from Swiss Re's Financial Report 2023.

The complete Financial Report 2023 is available at https://reports.swissre.com/2023/.

Swiss Re|  Financial Report 2023

Financial Statements

Group financial statements	140
Income statement	140
Statement of comprehensive income	141
Balance sheet	142
Statement of shareholders' equity	144
Statement of cash flows	146

Notes to the
Group financial statements	148
Note 1	Organisation and
	summary of significant
	accounting policies	148
Note 2	Information on
	business segments	157
Note 3	Insurance information	169
Note 4	Premiums written	173
Note 5	Unpaid claims and claim
	adjustment expenses	174
Note 6	Deferred acquisition costs
	(DAC) and acquired present
	value of future profits (PVFP)	189
Note 7	Investments	190
Note 8	Fair value disclosures	200
Note 9	Derivative
	financial instruments	208
Note 10	Disposals	213
Note 11	Debt and contingent
	capital instruments	214
Note 12	Leases	216
Note 13	Earnings per share	217
Note 14	Income taxes	218
Note 15	Benefit plans	222
Note 16	Share-based payments	228
Note 17	Compensation, participations
	and loans of members of
	governing bodies	230
Note 18	Related parties	231
Note 19	Commitments and
	contingent liabilities	232
Note 20	Significant subsidiaries
	and equity investees	233
Note 21	Variable interest entities	236
Report of the statutory auditor	240
Group financial years 2014-2023	246

Swiss Re Ltd	248
Annual Report	248
Income statement	249
Balance sheet	250
Notes	252
Proposal for allocation of
disposable profit	258
Report of the statutory auditor	259

Swiss Re|  Financial Report 2023

Financial statements

Income statement

For the years ended 31 December

USD millions	Note	2022	2023
Revenues
Gross premiums written	4	47 889	49 954
Net premiums written	4	43 917	45 095
Change in unearned premiums		-1 049	-339
Premiums earned	3	42 868	44 756
Fee income from policyholders	3	250	247
Net investment income - non-participating business1	7	2 869	3 995
Net realised investment gains/losses - non-participating business2	7	-3	719
Net investment result - unit-linked business	7	-43	21
Other revenues		57	62
Total revenues		45 998	49 800
Expenses
Claims and claim adjustment expenses3	3	-19 607	-18 646
Life and health benefits3	3	-13 721	-13 695
Return credited to policyholders		-280	-364
Acquisition costs	3	-7 800	-8 364
Operating expenses		-3 369	-3 737
Total expenses before interest expenses		-44 777	-44 806
Income before interest and income tax expense		1 221	4 994
Interest expenses		-570	-556
Income before income tax expense		651	4 438
Income tax expense	14	-171	-1 210
Net income before attribution of non-controlling interests		480	3 228
Income/loss attributable to non-controlling interests		-8	-14
Net income attributable to common shareholders		472	3 214
Earnings per share in USD
Basic	13	1.63	11.09
Diluted	13	1.60	10.49
Earnings per share in CHF4
Basic	13	1.63	9.94
Diluted	13	1.60	9.40

• Total impairments for the years ended 31 December of USD 18 million in 2022 and nil in 2023, respectively, were fully recognised in earnings.
  2 Total impairments for the years ended 31 December of USD 70 million in 2022 and nil in 2023, respectively, were fully recognised in earnings.
  3 The Group has revised the presentation of the medical business of Elips Versicherungen AG and starting 2023 reports it under claims and claim adjustment expenses. Comparative information was adjusted accordingly.
  4 The translation from USD to CHF is shown for informational purposes only and has been calculated using the Group's average exchange rates.

The accompanying notes are an integral part of the Group financial statements.

140	Swiss Re | Financial Report 2023

Financial statements

Statement of comprehensive income

For the years ended 31 December

USD millions	2022	2023
Net income before attribution of non-controlling interests	480	3 228
Other comprehensive income, net of tax:
Change in net unrealised investment gains/losses	-9 736	2 225
Change in other-than-temporary impairment	-2
Change in cash flow hedges		10
Change in foreign currency translation	68	-263
Change in adjustment for pension benefits	124	-27
Change in credit risk of financial liabilities at fair value option	-1	-1
Other comprehensive income/loss attributable to non-controlling interests	-7	25
Total comprehensive income/loss before attribution of non-controlling interests	-9 074	5 197
Comprehensive income/loss attributable to non-controlling interests	-1	-39
Total comprehensive income/loss attributable to common shareholders	-9 075	5 158

Reclassification out of accumulated other comprehensive income

For the years ended 31 December

	Net unrealised	Other-than-		Foreign	Adjustment	Credit risk of	Accumulated other
2022	investment	temporary	Cash flow	currency	for pension	financial liabilities at	comprehensive
USD millions	gains/losses1	impairment1	hedges1	translation1, 2	benefits3	fair value option	income
Balance as of 1 January	2 809	-6	0	-6 216	-549	4	-3 958
Change during the period	-13 429	-2		206	132	-1	-13 094
Amounts reclassified out of accumulated other
comprehensive income	1 197			-5	25		1 217
Tax	2 496			-133	-33		2 330
Balance as of period end	-6 927	-8	0	-6 148	-425	3	-13 505
	Net unrealised	Other-than-		Foreign	Adjustment	Credit risk of	Accumulated other
2023	investment	temporary	Cash flow	currency	for pension	financial liabilities at	comprehensive
USD millions	gains/losses1	impairment1	hedges1	translation1, 2	benefits3	fair value option	income
Balance as of 1 January	-6 927	-8	0	-6 148	-425	3	-13 505
Impact of ASC 3264	25	8					33
Change during the period	2 920		13	-340	-44	-2	2 547
Amounts reclassified out of accumulated other
comprehensive income	-123			-6	3		-126
Tax	-572		-3	83	14	1	-477
Balance as of period end	-4 677	0	10	-6 411	-452	2	-11 528

• Reclassification adjustment included in net income is presented in "Net realised investment gains/losses - non-participating business".

• Reclassification adjustment is limited to translation gains and losses realised upon sale or upon complete or substantially complete liquidation of an investment in a foreign entity.
  3 Reclassification adjustment included in net income is presented in "Operating expenses".
  4 Impact of ASC 326 "Financial Instruments - Credit Losses". Please refer to Note 1 "Organisation and summary of significant accounting policies" for more details.

The accompanying notes are an integral part of the Group financial statements.

Swiss Re | Financial Report 2023

141

Financial statements

Balance sheet

Assets

As of 31 December

USD millions	Note	2022	2023
Investments	7, 8, 9
Fixed income securities:
Available-for-sale (including 12 355 in 2022 and 12 996 in 2023 subject to securities
lending and repurchase agreements) (allowance for credit losses of 39 in 2023,
amortised cost: 2022: 82 638; 2023: 82 145)		74 089	76 207
Trading (including 143 in 2022 and 119 in 2023 subject to securities
lending and repurchase agreements)		484	1 005
Equity securities at fair value through earnings (including 12 in 2022 and 0 in 2023
subject to securities lending and repurchase agreements)		2 114	156
Policy loans, mortgages and other loans, net of allowance for credit losses of 36 in 2023		4 343	5 034
Investment real estate		2 931	2 905
Short-term investments (including 1 465 in 2022 and 2 339 in 2023
subject to securities lending and repurchase agreements)		8 907	9 931
Other invested assets, net of allowance for credit losses of 1 in 2023		8 794	11 510
Investments for unit-linked business (equity securities at fair value through earnings)		330	325
Total investments		101 992	107 073
Cash and cash equivalents (including 421 in 2022 and 1 191 in 2023 subject to securities lending,
and 5 in 2022 and 5 in 2023 backing unit-linked contracts)		4 077	4 583
Accrued investment income		684	795
Premiums and other receivables, net of allowance for credit losses of 71 in 2022 and 92 in 2023		18 145	19 077
Reinsurance recoverable on unpaid claims and policy benefits, net of allowance for credit losses of 31 in 2022
and 38 in 2023		6 507	6 104
Funds held by ceding companies, net of allowance for credit losses of 11 in 2023		13 929	16 178
Deferred acquisition costs	6	8 121	8 151
Acquired present value of future profits	6	794	724
Goodwill		3 863	3 978
Income taxes recoverable		356	530
Deferred tax assets	14	8 284	7 399
Other assets		3 924	4 984
Total assets		170 676	179 576

The accompanying notes are an integral part of the Group financial statements.

142	Swiss Re | Financial Report 2023

Financial statements

Liabilities and Equity

As of 31 December

USD millions	Note	2022	2023
Liabilities
Unpaid claims and claim adjustment expenses	5	85 418	87 513
Liabilities for life and health policy benefits		20 925	20 624
Policyholder account balances		4 850	4 775
Unearned premiums		14 747	15 488
Funds held under reinsurance treaties		6 921	8 460
Reinsurance balances payable		1 837	2 733
Income taxes payable		254	305
Deferred and other non-current tax liabilities	14	6 011	6 415
Short-term debt	11	786	1 291
Accrued expenses and other liabilities		5 866	7 075
Long-term debt	11	10 252	8 526
Total liabilities		157 867	163 205
Equity
Common shares, CHF 0.10 par value
2022: 317 497 306; 2023: 317 497 306 shares authorised and issued		30	30
Additional paid-in capital		293	378
Treasury shares, net of tax		-1 398	-1 282
Accumulated other comprehensive income:
Net unrealised investment gains/losses, net of tax		-6 927	-4 677
Other-than-temporary impairment, net of tax		-8
Cash flow hedges, net of tax			10
Foreign currency translation, net of tax		-6 148	-6 411
Adjustment for pension and other post-retirement benefits, net of tax		-425	-452
Credit risk of financial liabilities at fair value option, net of tax		3	2
Total accumulated other comprehensive income		-13 505	-11 528
Retained earnings		27 279	28 548
Shareholders' equity		12 699	16 146
Non-controlling interests		110	225
Total equity		12 809	16 371
Total liabilities and equity		170 676	179 576

The accompanying notes are an integral part of the Group financial statements.

Swiss Re | Financial Report 2023

143

Financial statements

Statement of shareholders' equity

For the years ended 31 December

USD millions	2022	2023
Common shares
Balance as of 1 January	30	30
Balance as of period end	30	30
Additional paid-in capital
Balance as of 1 January	266	293
Share-based compensation	13	51
Realised gains/losses on treasury shares	14	34
Balance as of period end	293	378
Treasury shares, net of tax
Balance as of 1 January	-1 402	-1 398
Purchase of treasury shares	-44	-8
Issuance of treasury shares, including share-based compensation to employees	48	124
Balance as of period end	-1 398	-1 282
Net unrealised investment gains/losses, net of tax
Balance as of 1 January	2 809	-6 927
Impact of ASC 3261		25
Changes during the period	-9 736	2 225
Balance as of period end	-6 927	-4 677
Other-than-temporary impairment, net of tax
Balance as of 1 January	-6	-8
Impact of ASC 3261		8
Changes during the period	-2
Balance as of period end	-8	0
Cash flow hedges, net of tax
Balance as of 1 January	0	0
Changes during the period		10
Balance as of period end	0	10
Foreign currency translation, net of tax
Balance as of 1 January	-6 216	-6 148
Changes during the period	68	-263
Balance as of period end	-6 148	-6 411
Adjustment for pension and other post-retirement benefits, net of tax
Balance as of 1 January	-549	-425
Changes during the period	124	-27
Balance as of period end	-425	-452

The accompanying notes are an integral part of the Group financial statements.

144	Swiss Re | Financial Report 2023

Financial statements

USD millions	2022	2023
Credit risk of financial liabilities at fair value option, net of tax
Balance as of 1 January	4	3
Changes during the period	-1	-1
Balance as of period end	3	2
Retained earnings
Balance as of 1 January	28 632	27 279
Net income after attribution of non-controlling interests	472	3 214
Dividends on common shares	-1 825	-1 850
Impact of ASC 3261		-95
Balance as of period end	27 279	28 548
Shareholders' equity	12 699	16 146
Non-controlling interests
Balance as of 1 January	110	110
Transactions with non-controlling interests		79
Income/loss attributable to non-controlling interests	8	14
Other comprehensive income attributable to non-controlling interests:
Change in net unrealised investment gains/losses	-4	8
Change in foreign currency translation	-3	17
Dividends to non-controlling interests	-1	-3
Balance as of period end	110	225
Total equity	12 809	16 371

• Impact of ASC 326 "Financial Instruments - Credit Losses". Please refer to Note 1 "Organisation and summary of significant accounting policies" for more details.

The accompanying notes are an integral part of the Group financial statements.

Swiss Re | Financial Report 2023

145

Financial statements

Statement of cash flows

For the years ended 31 December

USD millions	2022	2023
Cash flows from operating activities
Net income attributable to common shareholders	472	3 214
Add income/loss attributable to non-controlling interests	8	14
Adjustments to reconcile net income to net cash provided/used by operating activities:
Depreciation, amortisation and other non-cash items	425	-68
Net realised investment gains/losses	67	-717
Income from equity-accounted investees, net of dividends received	258	23
Change in:
Technical provisions and other reinsurance assets and liabilities, net	3 263	1 347
Funds held by ceding companies and under reinsurance treaties	-1 019	-701
Reinsurance recoverable on unpaid claims and policy benefits	-143	203
Other assets and liabilities, net	-460	-185
Income taxes payable/recoverable	-248	686
Derivative financial instruments and collateral, net	304	270
Net cash provided/used by operating activities	2 927	4 086
Cash flows from investing activities
Fixed income securities:
Sales	24 088	19 912
Maturities	5 447	9 836
Purchases	-32 393	-29 305
Net purchases/sales/maturities of short-term investments	-590	-783
Equity securities:
Sales	2 461	2 872
Purchases	-1 270	-895
Securities purchased/sold under agreement to resell/repurchase, net	193	-827
Cash paid/received for acquisitions/disposals and reinsurance transactions, net	22	-42
Net purchases/sales/maturities of other investments	-321	-1 152
Net purchases/sales/maturities of investments held for unit-linked business	25	22
Net cash provided/used by investing activities	-2 338	-362
Cash flows from financing activities
Policyholder account balances, unit-linked business:
Deposits	18	5
Withdrawals	-66	-53
Issuance/repayment of long-term debt	1 449	-710
Issuance/repayment of short-term debt	-806	-818
Purchase/sale of treasury shares	-6	126
Dividends paid to shareholders	-1 825	-1 850
Dividends paid to non-controlling interests	-1	-3
Transactions with non-controlling interests		79
Net cash provided/used by financing activities	-1 237	-3 224

The accompanying notes are an integral part of the Group financial statements.

146	Swiss Re | Financial Report 2023