Swiss Re Corporate Solutions Ltd A+ Aa3 AA– Swiss Re International SE A+ Aa3 AA– Westport Insurance Corporation A+ Aa3 AA– Other Corporate Solutions US entities (NAS, NAE, NAC, WIIC, FSIC) A+ Not rated AA– Swiss Re Corporate Solutions Brasil Seguros Not rated Baa3 Not rated Company Aseguradora de Fianzas S.A. Confianza Not rated Baa2 Not rated
Recent accounting guidance In January 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-01, “Accounting for Investments in Qualified Affordable Housing Projects (a consensus of the FASB Emerging Issues Task Force)”, an update to topic 323, “Investments — Equity Method and Joint Ventures”. The Low Income Housing Tax Credit, a program created under the US Tax Reform Act of 1986, offers US federal tax credits to investors that provide capital to facilitate the development, construction, and rehabilitation of low-income rental property. ASU 2014-01 modifies the conditions that must be met to present the pre-tax effects and related tax benefits of investments in qualified affordable housing projects as a component of income. Investors that do not qualify for “net” presentation under the new guidance will continue to account for such investments under the equity method or cost method, which results in losses recognised in pre-tax income and tax benefits recognised in income taxes. For investments that qualify for the “net” presentation of investment performance, the ASU introduces a “proportional amortization method” that can be elected to amortise the investment basis. The Group adopted ASU 2014-01 on 1 January 2015. The adoption did not have a material effect on the Group’s financial statements.
The Group presents four core operating business segments: Property, Casualty, Specialty and Credit.
As of 31 December 2014 and 2015, securities of USD 1 581 million and USD 1 723 million, respectively, were transferred to third parties under securities lending transactions and repurchase agreements on a fully collateralised basis. There were no associated liabilities.
Current taxes 77 126 Deferred taxes 118 23 Income tax expense 195 149
Income taxes paid in 2014 and 2015 were USD 63 million and USD 155 million, respectively.
Claims and claim adjustment expenses remained flat at CHF 1 422 million in 2015 (2014: CHF 1 420 million). The slight increase mainly reflected foreign exchange movements and several man-made losses, partly offset by absence of natural catastrophe losses. Excluding the effects of foreign exchange movements, claims and claims adjustment expenses decreased by 2%.
Investment result Net investment result amounted to CHF 20 million, compared to CHF 141 million in the prior year.
̤ The Investment Committee reviews the financial risk analysis methodology and valuation related to each asset class and ensures that the relevant management processes and controlling mechanisms are in place.
Financial and reinsurance assets Funds held by ceding companies 486 449 Cash and cash equivalents 33 44 Reinsurance recoverable from unpaid claims 3 4 20 Reinsurance recoverable from unearned premiums 3 11 9 Reinsurance recoverable on technical provisions retroceded 15 29 Tangible assets – 0 Deferred acquisition costs 3 336 367 Intangible assets – 10 Premiums and other receivables from reinsurance 3 1 233 1 217 Other receivables 10 14 Other assets – 4 Accrued income 9 6 Total financial and reinsurance assets 2 122 2 140
Funds held by ceding companies Funds held by ceding companies consist mainly of assets that belong to the Company but are withheld by the cedant due to regulatory or legal requirements, or to retain control over investments and reduce a potential credit risk. Assets are initially measured based on the consideration received. Subsequently the funds held by ceding companies are measured at the consideration received or market value of the underlying assets.
As of 31 December 2015, securities of CHF 866 million (2014: CHF 999 million) were lent to Swiss Reinsurance Company Ltd under securities lending agreements. As of 31 December 2015 and 2014, there were no securities lent to third parties.
As of 31 December 2015, the following public placed debentures were outstanding: 10 Deposit arrangements
The following balances were related to deposit accounted reinsurance contracts: 11 Claims on and obligations towards affiliated companies 12 Release of undisclosed reserves