Gross premiums earned by regions, 2017 (Total USD 4 250 million)
Income/loss before income tax expense/benefit 180 –949 Income tax expense/benefit 11 –10 204
Foreign currency remeasurement and translation Transactions denominated in foreign currencies are remeasured to the respective subsidiary’s functional currency at average exchange rates. Monetary assets and liabilities are remeasured to the functional currency at closing exchange rates, whereas nonmonetary assets and liabilities are remeasured to the functional currency at historical rates. Remeasurement gains and losses on monetary assets and liabilities and trading securities are reported in earnings. Remeasurement gains and losses on available-forsale securities, investments in consolidated subsidiaries and investments accounted for using the equity method are reported in shareholder’s equity.
Share-based payment transactions As of 31 December 2017, the Group has a Leadership Performance Plan, restricted shares, and a Global Share Participation Plan. The Group accounts for share-based payment transactions with employees using the fair value method. Under the fair value method, the fair value of the awards is recognised in earnings over the vesting period.
Claims frequency information Claims frequency is displayed for direct business only as individual claims information is generally not available for assumed and ceded business. Claims are counted individually per contract to produce the claims frequency table. For some direct business, summary reports are received and multiple claims are booked under a single claim code. This “bulk booking” is usually done at a programme, policy year, state, country and/or line of business level of detail. This approach may be applied to business, which has a high volume of claim counts, but with only minor claims dollars associated with each claim.
Changes in claim count across accident years is volume driven. For example, the IHC acquisition and feed of policy level detail is the main driver for the increases in counts for accident years 2016 and subsequent.
Assets pledged As of 31 December 2017, investments with a carrying value of USD 792 million were on deposit with regulatory agencies in accordance with local requirements, and investments with a carrying value of USD 241 million were placed on deposit or pledged to secure certain reinsurance liabilities.
Debt securities issued by governments and government agencies: US Treasury and other US government corporations and agencies 1 346 11 1 346 11 US Agency securitised products 105 1 105 1 States of the United States and political subdivisions of the states 195 7 195 7 Canada 122 4 34 7 156 11 Brazil 17 0 17 0 Australia 19 0 9 1 28 1 Other 159 6 21 3 180 9
Certain financial instruments are classified within level 3 of the fair value hierarchy, because they trade infrequently and therefore have little or no price transparency. Such instruments include private equity, less liquid corporate debt securities and certain assetbacked securities. Certain over-the-counter (OTC) derivatives trade in less liquid markets with limited pricing information, and the determination of fair value for these derivatives is inherently more difficult. Such instruments are classified within level 3 of the fair value hierarchy. When appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads, and credit considerations. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used.
Total assets at fair value 2 817 3 749 13 8 6 587
Assets Fixed income securities held for proprietary investment purposes 3 054 3 609 6 663
As previously noted in the tax rate reconciliation, a tax benefit of USD 15 million arises from revaluing the US deferred tax assets and liabilities to the new US tax rate of 21% (from 35%). Accordingly, the revaluing reduced the US deferred tax assets by USD 41 million and the US deferred tax liabilities by USD 56 million (net USD 15 million).
The Group monitors changes to the facts and circumstances of the existing involvement with legal entities to determine whether they require reconsideration of the entity’s designation as a VIE or voting interest entity. For VIEs, the Group reassesses regularly the primary beneficiary determination.
The Company paid an ordinary dividend in cash of CHF 150 million.
The nominal share capital of the Company remained unchanged at CHF 100 million at 31 December 2017.
Future prospects and business development Structural changes Addition of new entities The Company’s subsidiary Corporate Solutions Brasil Seguros S.A. (SRCSB) acquired the commercial large-risk portfolio from Bradesco Seguros S.A. (Brasil) in exchange of a 40% equity stake in SRCSB, while Swiss Re Corporate Solutions Ltd retains a 60% stake. This transaction was approved by the relevant regulators.
The accompanying notes are an integral part of Swiss Re Corporate Solutions Ltd’s financial statements.
Loans are carried at nominal value. Value adjustments are recorded where the expected recovery value is lower than the nominal value.
Funds held by ceding companies 603 1 566 Premiums and other receivables from reinsurance 950 1 300 Other receivables 72 90 Reinsurance balances payable 10 470 Other liabilities 33 54
There were no outstanding claims on and obligations towards the parent company, Swiss Re Ltd, at the end of the period 2017 and 2016.
16 Personnel information and administrative expenses As of 31 December 2017, the Company employed a worldwide staff at an average of 303 (2016: 325) full time equivalents.
As such, the effective cash dividend amount translated into CHF at spot rate on the settlement date, must not exceed CHF 60 million. This threshold of CHF 60 million is presented in the below table and reflects the maximum amount in CHF to be paid.