Swiss Re reports net income of USD 1.3 billion for first nine months of 2021

News release

Swiss Re reports net income of USD 1.3 billion for first nine months of 2021

Ad hoc announcement pursuant to Article 53 LR

• Property and Casualty Reinsurance (P&C Re) net income of
  USD 1.5 billion; strong combined ratio of 97.5% as impacts from large-loss events were contained by disciplined underwriting
• Corporate Solutions net income of USD 425 million; very strong combined ratio of 91.1%
• Life and Health Reinsurance (L&H Re) net loss narrowed to USD 62 million; excluding COVID-19 losses, net income of USD 899 million
• Strong return on investments (ROI) of 3.0%
• Very strong capital position with a Group Swiss Solvency Test (SST) ratio of 234% as of 1 July 2021
• Excluding COVID-19 losses, Group net income of USD 2.3 billion and return on equity (ROE) of 11.7%

Zurich, 29 October 2021 - Driven by the performance of its property and casualty businesses, Swiss Re reported a Group net income of USD 1.3 billion in the first nine months of 2021, despite significant large-loss events, particularly in the third quarter. Swiss Re's capital position remained very strong, with a Group SST ratio of 234% as of 1 July 2021.

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said:

"Thanks to the Group's sustained focus on portfolio quality and disciplined underwriting, our property and casualty businesses delivered excellent results in the first nine months of 2021. At the same time, we were able to support communities impacted by natural catastrophes and the COVID-19 pandemic."

Swiss Re's Group Chief Financial Officer John Dacey said: "P&C Re and Corporate Solutions are delivering on their ambitious targets for this year, with a combined net income of just below USD 2 billion in the first nine months. We are also pleased with the underlying performance of L&H Re, which offset the impact from the pandemic, resulting in a reported profit for the second consecutive quarter."

Swiss Re significantly improves profitability across businesses Swiss Re achieved strong results for the first nine months of 2021 and reported an ROE of 6.6%, against the background of the continued COVID- 19 pandemic and large natural catastrophe events. Net premiums earned

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and fee income for the Group rose by 5.9% to USD 32.0 billion in the first nine months of 2021 compared with the same period last year, with all businesses reporting increases. Swiss Re's net income excluding COVID-19 increased by 38% year on year to USD 2.3 billion.

Swiss Re achieved a return on investments of 3.0% in the first nine months of 2021. The investment result was largely driven by recurring income as well as equity valuation gains, combined with no credit impairments, as Swiss Re successfully navigated the low-yield environment.

P&C Re reports strong profit despite large natural catastrophe losses P&C Re reported a net income of USD 1.5 billion in the first nine months of 2021, compared with a net loss of USD 201 million in the same period last year. This result was achieved while the business absorbed large natural catastrophe losses and reflects the improved quality of the portfolio, dramatically lower COVID-19 impacts as well as strong investment results. P&C Re's net premiums earned grew by 6.0% to USD 16.4 billion, reflecting the continued price momentum as well as favourable foreign exchange developments.

Large natural catastrophe losses for the first nine months of the year amounted to USD 1.7 billion - higher than expected, but still below the premiums earned for this class of business. The losses mainly related to Hurricane Ida and the floods in Europe in the third quarter, as well as the US winter storm Uri in the first quarter. In addition, large man-made losses amounted to USD 272 million year to date.

The combined ratio significantly improved to 97.5% for the first nine months of 2021 from 110.3% in the same period last year. On a normalised1 basis, P&C Re achieved a combined ratio of 94.0% and is well on track to meet its target of less than 95% for the full year.

L&H Re's improved underlying performance, driven by management actions, largely compensates continuing significant COVID-19 impacts In the first nine months of 2021, L&H Re reported a net loss of USD 62 million. This compares with a net income of USD 72 million in the prior-year period, as the business incurred significantly higher COVID-19-related claims of

USD 1.2 billion in the first nine months of 2021, primarily originating in the US. Despite the impact from the pandemic, L&H Re reported positive net income for the second and third quarters of 2021.

1 Assumes expected large natural catastrophe loss burden and excludes prior-year reserve development as well as the COVID-19 impact.

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Net premiums earned and fee income increased by 10.2% to USD 11.1 billion, buttressed by large transactions and favourable foreign exchange developments.

Excluding COVID-19 losses, L&H Re's underlying business performed well, increasing net income by 45% year on year to USD 899 million and achieving an ROE of 17.5%. This was primarily driven by solid underwriting performance across all regions, supported by in-force management actions and favourable investment results.

Corporate Solutions delivers very strong combined ratio

Corporate Solutions reported a net income of USD 425 million in the first nine months of 2021, compared with a net loss of USD 357 million in the same period last year. The Business Unit continued to benefit from the implemented strategic actions, allowing it to successfully absorb large natural catastrophe losses of USD 286 million, mainly relating to Uri and Hurricane Ida, and large man-made losses, totalling USD 212 million for the first nine months of 2021.

Net premiums earned rose 6.2% to USD 3.9 billion, thanks to rate increases, selective new business growth and favourable foreign exchange developments, while the impact of the previous portfolio pruning actions diminished. Year to date, Corporate Solutions achieved risk-adjusted price increases of 12%2, as the attractive pricing momentum continued.

The Business Unit reported a combined ratio of 91.1% for the first nine months of the year, down from 116% for the same period last year, as a result of disciplined underwriting, strict expense management, continued rate increases and very limited COVID-19-related impacts in 2021. With a normalised combined ratio of 95.7% for the first nine months of the year, Corporate Solutions is well on track to meet its target of less than 97% in 2021.

iptiQ continues dynamic growth

iptiQ continued to successfully grow its business. Compared with the same period last year, gross premiums written for the core business rose by 118% to USD 520 million, with good contributions across all markets.

Outlook

Swiss Re's Group Chief Executive Officer Christian Mumenthaler said: "We continue to reap the benefits of our strategic underwriting actions and see opportunities across all businesses to deploy capital at attractive returns. This gives us confidence for the remainder of the year and into 2022, with all our businesses well positioned to continue their strong performance."

2 Excludes elipsLife.

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Details of 9M 2021 performance

		9M 20203	9M 2020	9M 2021	9M 2021
			Excluding		Excluding
USD millions, unless otherwise stated		COVID-194		COVID-194
Consolidated	Net premiums earned	30 164		31 950
Group (total)	and fee income
	Net income/loss	-691	1 643	1 258	2 261
	Return on equity	-3.3	7.5	6.6	11.7
	(%, annualised)
	Return on investments	3.4		3.0
	(%, annualised)
	Recurring income yield	2.4		2.2
	(%, annualised)

		31.12.20		30.09.21
	Shareholders' equity	27 135		23 568
	Book value per share	93.90		81.55
	(USD)
		9M 20203	9M 2020	9M 2021	9M 2021
			Excluding		Excluding
			COVID-194		COVID-194
P&C	Net premiums earned	15 517		16 443
Reinsurance
	Net income/loss	-201	1 039	1 460	1 513
	Combined ratio (%)	110.3	100.1	97.5	96.9
	Return on equity	-3.2	15.5	21.2	22.0
	(%, annualised)
L&H	Net premiums earned	10 102		11 136
Reinsurance	and fee income
	Net income/loss	72	620	-62	899
	Recurring income yield	3.0		2.8
	(%, annualised)
	Return on equity	1.2	9.7	-1.3	17.5
	(%, annualised)
Corporate	Net premiums earned	3 715		3 944
Solutions
	Net income/loss	-357	183	425	406
	Combined ratio (%)	116.0	97.6	91.1	91.8
	Return on equity	-20.2	9.3	22.3	21.4
	(%, annualised)

1. For Corporate Solutions, 9M 2020 has been revised to reflect the results of elipsLife, which as of 1 January 2021 is reported as part of Corporate Solutions following the disbandment of the Life Capital Business Unit at the end of 2020.
2. This column is for reference only and excludes the impact of the reserves established for COVID-19-related claims, including estimated tax impacts.

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Details of 9M 2021 COVID-19 losses in USD millions

9M 2021	P&C	L&H	Corporate
Reinsurance	Reinsurance	Solutions	Group items	Total
Event cancellation	54		-60		-6
Business	34		24		58
interruption
Credit & surety	-5		-9		-14
Mortality		1 179	12	10	1 201
Other lines	18	3	6		27
Total	101	1 182	-27	10	1 266

Media conference call

Swiss Re will hold a media call this morning at 08:30 CEST. In order to participate, please dial in 10 minutes prior to the start using the following numbers:

Switzerland:	+41	(0)	58 310 5000
United Kingdom:	+44	(0)	207 107 0613
United States:	[phone]
Germany:	+49	(0)69 5050 0082
France:	+33	(0)1 7091 8706
Hong Kong:	[phone]

Investor and analyst conference call

Swiss Re will hold an investors' and analysts' call at 14:00 CEST, which will focus exclusively on Q&A. You are kindly requested to dial into the conference call 10-15 minutes prior to the start using the following numbers:

Switzerland:	+41	(0)	58 310 5000
United Kingdom:	+44	(0)	207 107 0613
United States:	[phone]
Germany:	+49	(0)	69 5050 0082
France:	+33	(0)	1 7091 8706

Swiss Re

The Swiss Re Group is one of the world's leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk - from natural catastrophes to climate change, from ageing populations to cybercrime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally.

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