Moreover, in light of the cyclical risk assessment, we invested heavily in the organic growth of our Property & Casualty (P&C) businesses. In 2012, we cancelled a quota share reinsurance agreement worth 20% of our P&C business. We also pushed ahead with the organic growth of Corporate Solutions, invested in the infrastructure of this division and expanded our presence in this sector through a number of small-scale acquisitions. From 2016, which represented a turning point for the market as the achievable premiums became qualitatively weaker, we gradually reduced the amount of capital invested in P&C again, a decision that resulted in some of our competitors recording a higher rate of growth than we did.
In another development, we have allocated new capital to Life Capital. We have partly withdrawn from the US closed book business but at the same time have invested in several large-scale transactions in the United Kingdom. We have also expanded our group life insurance and individual life business through new sales channels.
With climate change very likely linked to rising sea levels and increased rainfall, the impact from flooding associated with tropical cyclones and other extreme weather events could be even more severe in the future. In 2018, the western Pacific typhoon season produced 29 named storms, higher than the average of 26.6, prompting floods and leaving thousands of people stranded. The possibility of even more, or worse, storms in the future is frightening.
Swiss Re’s telematics solution: fairer premiums, safer roads Vehicles connected to the Internet of Things (IoT) open the door to UBI products that assess pricing based on when, where and how one drives. Swiss Re’s first telematics-based product, Coloride, uses a phone app to identify risky manoeuvres, speeding habits and phone usage while driving, and offers post-drive coaching when the trip is over. Over time, Coloride assigns a risk score to each driver that an insurer can use to calculate the UBI premium. By offering a financial incentive to cautious drivers and flagging risky behaviour, insurers encourage responsible driving, making roads safer for everyone.
A recent United Nations report found that 40 percent of the world’s population lives within 100 kilometres of a coast. This trend is expected to continue, with populations and commercial assets further concentrating in waterfront communities. At the same time, climate change is intensifying the impact of floods resulting from hurricanes and storm surges, directly threatening the social, economic and cultural security of a growing part of the world’s population.
Digital Education & Coaching Wellness programme app transforms data (e.g. diet, exercise) into actionable insights.
Protecting major productions What happens if a major sports event is about to kick off and a sudden downpour knocks out the power, leaving thousands of fans in the dark?
Underwriters Actuaries Data Scientists Information Architects Claims Experts Engineers Innovators Climate Experts
From left to right 1. Philip K. Ryan 2. Sir Paul Tucker 3. Raymond K.F. Ch’ien 4. Jacques de Vaucleroy 5. Eileen Rominger 6. Joerg Reinhardt 7. Walter B. Kielholz 8. Renato Fassbind 9. Susan L. Wagner 10. Trevor Manuel 11. Jay Ralph 12. Larry Zimpleman 13. Karen Gavan 38 Swiss Re 2018 Business Report
Premiums earned and fee income 33 705 34 461 2 Earnings per share in CHF 1.02 1.34 32
This dubious political development is playing out against a backdrop of remarkable technological and scientific progress, which is occurring at an unprecedented pace. Such progress undoubtedly simplifies a wide range of tasks, particularly in business, but it also polarises society and is clearly a source of “angst” for many people. The way in which people communicate is becoming more aggressive, as is the tone of political discourse.
Our in-depth research carried out centrally at the Swiss Re Institute helps us assess the future profit potential of individual risk portfolios. Our executive managers and the Board of Directors also benefit from the professional advice of recognised senior advisers at the Institute, who come from a wide range of scientific and political fields. In this way, we make every possible effort to ensure that the decisions we take regarding capital allocation are the very best they can be.
We achieved all this quicker than many expected. We then started to implement our plan for paying back capital – surplus to our conservative criteria – to our shareholders. The first step here was to pay back the convertible bond that was issued during the crisis, which, back then, was expensive and potentially diluted our common shareholders at conversion; we then continually increased the dividend, implemented the tax-free (in Switzerland) repayment of capital and established several share buyback programmes.
What we’ve experienced over the past year must serve as a wake-up call to stand together in unity and step up our efforts against climate change. What’s at stake is not only visible in the footage, but also in the figures: the Swiss Re Institute estimates that total economic losses from natural and man-made disasters in 2018 amounted to a shocking USD 155 billion. Unfortunately, only USD 81 billion of this economic loss is insured, even though the majority of these losses occurred in developed countries. All in all, I feel that the re/insurance industry has done a good job over the last two years of paying claims promptly, allowing people to recover and rebuild following these events. We also supported people and businesses following devastating man-made disasters in 2018, like the collapse of the Ituango dam in Colombia.
Insurance is another central component of system resilience. It plays a vital role in stabilising financial volatility for households and businesses. Nevertheless, there are still large “insurance protection gaps” across all levels of society. We define this gap as the uninsured portion of losses from an adverse event. For example, we estimate that the gap for global mortality and property risk currently stands close to USD 500 billion, or 70% of the size of the current respective insurance markets (or 0.6% of global GDP).2
We expect a slightly positive underwriting result for the global non-life sector. Overall profitability of the global property/casualty insurance remains at moderate levels, also driven continuing low investment returns.
Fee income from policyholders 586 586 0 Net investment income – non-participating business 3 708 4 075 10 Net realised investment gains/losses – non-participating business 1 727 65 –96 Net investment result – unit-linked and with-profit business 3 315 –1 593 —
“ Our extraordinary financial strength enabled us to support our clients in these tough times, and in 2018 we absorbed USD 3.0 billion of large claims.”
Business performance Premiums earned and fee income for the Group amounted to USD 34.5 billion for 2018, an increase of 2.2% year-on-year. Gross premiums written increased in the same period by 4.7% to USD 36.4 billion, primarily driven by premium growth across the Group’s life and health businesses.
Total: USD 34.5 billion 47% P&C Reinsurance 37% L&H Reinsurance 11% Corporate Solutions 5% Life Capital
Competitive advantage in underwriting Swiss Re is fundamentally a knowledge company, especially when it comes to underwriting. We channel over 150 years of experience and cutting-edge research and development (R&D) into two pillars of outperformance: active capital allocation across insurance risk pools and distinctive underwriting of individual risks. We blend experience, proprietary data and forward-looking research, and create unique underwriting opportunities and access to risk pools.
Investment result The Group’s investment portfolio, excluding unit-linked and with-profit investments, decreased to USD 122.6 billion at the end of 2018, compared to USD 131.7 billion at the end of 2017. The decrease was driven by the strengthening of the US dollar as well as the impact from credit spread widening and a rise in interest rates.
The return on investments for 2018 was 2.8%, reflecting a negative impact from the recent change in US GAAP accounting guidance. The result was primarily driven by net investment income, which contributed more significantly than in prior years, reflecting a higher quality of earnings. This compared to a return of investments of 3.9% in 2017, with the decrease almost entirely attributable to a reduced contribution from equity securities. The Group’s non-participating net investment income increased to USD 4.1 billion in 2018 compared to USD 3.7 billion the prior year. The Group’s fixed income running yield was steady at 2.9%.
In 2018, Asset Management continued on its journey to integrate Environmental, Social and Governance (ESG) criteria into its investment process, now applying them broadly and systematically to nearly 100% of Swiss Re’s investment portfolio.
Proactive risk management through reinsurance We leverage technology to understand risks better, improve our underwriting processes and pricing and to increase efficiency. Proactive risk management in the form of reinsurance offers protection when the unexpected happens and provides the security and predictability to attract investment in innovation and infrastructure. This translates into tangible benefits for individuals across a wide range of sectors, such as housing, food security, financial wellbeing and healthier lives. Swiss Re provides protection for clients from risks in these and other areas.
Net realised investment gains/losses 613 –16 — Other revenues 48 36 –25
Outlook Renewals of loss-affected natural catastrophe business experienced rate increases. We had opportunities to grow our natural catastrophe business in North America at attractive terms. In non-loss-affected markets, rates remain stable overall, with some minor volatility.
premiums written and premiums for insurance in derivative form, net of internal fronting for the Reinsurance Business Unit, increased by 13.6% to USD 4.6 billion in 2018. Rates, as well as terms and conditions, moderately improved after the previous year’s natural catastrophe events. However, the rate environment remained depressed and a substantial acceleration of market hardening is required to re-establish a sustainable market environment.
Weighting in indices As of 31 December 2018 Index weight (in %)
EVM performance Underwriting result in Property & Casualty Reinsurance and Corporate Solutions impacted by large losses, partially offset by strong new business contributions in Life & Health Reinsurance.
Investment result Mark-to-market investment result 1 287 1 912 273 1 099 561 5 132 Benchmark investment result −542 −757 −116 −295 −51 −1 761
Life and health risk increases due to business growth in Asian markets increasing critical illness and lethal pandemic exposure. Mortality trend risk also increases reflecting an update on external retrocession cashflow. The increase is further driven by the introduction of an improved health model.
Credit risk increases slightly since SST 2018 driven by business growth in credit and surety business.
The Group’s leverage is comfortably within target capital structure senior leverage target range (15–25%) and at within the subordinated leverage target range (15–20%), providing the Group with additional financial flexibility.
Central Risk Management units ̤ Oversight of financial market, credit and liquidity risk ̤ Shared risk expertise: risk modelling and governance, as well as political, sustainability and emerging risks
̤ The Compliance function oversees Swiss Re’s compliance with applicable laws, regulations, rules and the Code of Conduct. It also assists the Group Board, Group Executive Committee and other management bodies in identifying, mitigating and managing compliance risks.
Swiss Re has implemented a principlebased integrated internal control system to mitigate identified operational risks including financial reporting and compliance risks, as well as risks that could impair the effectiveness and efficiency of operations. This control system represents a subset of Swiss Re’s risk control framework and is based on international standards established by COSO (the Committee of Sponsoring Organisations of the Treadway Commission). It is applied on multiple organisational levels, including Group, functions, regions and legal entities.
̤ Financial market risk represents the potential impact on assets or liabilities that may arise from movements in financial market prices or rates, such as equity prices, interest rates, credit spreads, foreign exchange rates or real estate prices. Financial market risk originates from two main sources: investment activities and the sensitivity of the economic value of liabilities to financial market fluctuations.
Group companies is provided in Note 19 to the Group financial statements on pages 290–292.
For further details on the share buy-back programmes please visit: www.swissre.com/investors/shares/share_buyback/
65.7% Institutional shareholders 29.9% Individual shareholders 4.4% Swiss Re employees 58.7% Switzerland 17.9% United Kingdom 12.9% USA
Renato Fassbind was elected to the Board of Directors of Swiss Re Ltd in 2011. He was appointed Vice Chairman in 2012 and Lead Independent Director in 2014. He chairs the Audit Committee and is a member of the Chairman’s and Governance Committee and the Compensation Committee.
Experience in listed company board Exp erie nc e i n CE
Nominations for re-election by the Annual General Meeting on 17 April 2019 On 1 January 2014 the Ordinance against Excessive Compensation at Public Corporations entered into effect. It provides that, as of the Annual General Meeting 2014, the shareholders will annually elect the members of the Board of Directors, the Chairman of the Board of Directors and the members of the Compensation Committee, individually and separately, for one-year terms.
The Board of Directors furthermore proposes that Renato Fassbind, Raymond K.F. Ch’ien, Joerg Reinhardt and Jacques de Vaucleroy be re-elected as members of the Compensation Committee.
Members ̤ Jacques de Vaucleroy, Chair ̤ Raymond K.F. Ch’ien ̤ Renato Fassbind ̤ Joerg Reinhardt
̤ Is informed of the quarterly and semi-annual financial statements for both Swiss Re Ltd and the Swiss Re Group, which are approved by the Audit Committee
̤ Approves the publication of the Annual Report, semi-annual financial statements and quarterly key financial figures news releases
Capital: ̤ Takes decisions regarding equity and equity-linked issuances and reductions of equity in line with applicable law
People Strategy ̤ has responsibility for the Group’s people management, subject to the authority of the Board of Directors.
Board supervision of Executive Management Swiss Re Ltd’s Board of Directors maintains effective and consistent oversight and monitors the execution of responsibilities it has delegated to Executive Management through the following control and information instruments.
Involvement of Executive Management in meetings of the Board of Directors The Group EC members attend Board meetings as far as deemed appropriate by the Chairman and the other Board members. The presence of the entire Group EC was required for 4 Board meetings in 2018, and selected members were invited to 11 further Board meetings. The Group EC members do not attend the constitutional meeting of the Board of Directors following the Annual General Meeting of shareholders and the Board self-assessment session.
Educational background ̤ PhD in Political Science, University of St.Gallen, Switzerland
Professional experience Edouard Schmid joined Swiss Re in 1991 as a risk analyst, developing catastrophe models and supporting property catastrophe underwriting on a global basis. Since 1996, he was a team leader in the Cat Perils unit, until he became Head Cat Perils & Retrocession in 2002. From 2003 until 2008, he was based in Hong Kong as Chief Underwriter Property & Specialty Asia. He returned to Zurich in 2008 and served as Head Property & Casualty Risk and Actuarial Management, and, concurrently, as Chief Risk Officer Corporate Solutions from 2011. In May 2012, he became Head Property & Specialty Reinsurance. Edouard Schmid was appointed Group Chief Underwriting Officer and member of the Group Executive Committee as of July 2017.
Resolutions pass by an absolute majority of votes validly cast (excluding blank and invalid ballots), except where the law requires otherwise.
Agenda The Board of Directors announces the agenda items and the proposals for the General Meeting of shareholders. Shareholders with voting power whose combined holdings represent shares with a nominal value of at least CHF 100 000 may, no later than 45 days before the date of the meeting, request in writing that a particular agenda item, together with the relevant proposals, be included in the agenda.
Auditors The General Meeting of shareholders annually elects the external auditor.
Information policy As a global company, Swiss Re strives to inform its stakeholders openly, consistently and in a transparent manner – beyond the boundaries of legal information requirements.
News release 20 December Swiss Re agrees further minority investment by MS&AD into ReAssure, increasing its shareholding to 25%
Pay for performance The Compensation Committee ensures that Group EC compensation is linked to the business performance of Swiss Re by delivering a substantial portion of compensation in the form of variable and performance-related incentives.
Overall Group assessment and proposal from management to the Compensation Committee, which retains final decision on adjustment. Reviewed proposal recommended for approval to the full Board of Directors.
Performance Share Units The performance condition for PSUs is relative total shareholder return (TSR) measured over three years. The PSUs vest within a range of 0% to 200%. Vesting starts at the 50th percentile of TSR relative to peers with 50% vesting and is capped at 200%** vesting at the 75th percentile relative to peers. In case of a negative TSR over three years, the Compensation Committee retains the discretion to reduce the level of vesting.
Employment conditions The Group EC, including the Group CEO, have employment contracts with notice periods of 12 months and no severance clauses. Information on “change of control” clauses is covered in the Corporate Governance section on page 137 of this Financial Report.
the Articles of Association respectively. 3 Board of Directors is informed.
Swiss Re’s 14 943 talented employees achieved all this. In the global employee engagement survey, staff commended empowerment and autonomy, open and safe dialogue with management, and diversity. The Group’s open mind, inclusive of individual differences, was also recognised externally: Swiss Re was rewarded by inclusion in the Bloomberg Gender-Equality index for its focus and transparency on gender-related topics in the workplace.
Performance targets used for the financial assessment are considered to be commercially sensitive to the business, and disclosure of such may provide an unfair advantage to Swiss Re’s competitors. However, to further increase transparency on the bonus-setting process, indicative achievements against the targets are disclosed.
ROE Net operating margin EVM profit (% of ENW) ENW growth per shareF
Christian Mumenthaler, Group CEO 108 779 119 029 David Cole, former Group Chief Financial Officer 57 825 n/a John R. Dacey, Group Chief Financial Officer 57 825 55 178 Guido Fürer, Group Chief Investment Officer 68 394 68 971 Agostino Galvagni, CEO Corporate Solutions 57 825 55 178 Jean-Jacques Henchoz, former CEO Reinsurance EMEA 46 259 n/a Russell Higginbotham, CEO Reinsurance EMEA n/a 26 277 Thierry Léger, CEO Life Capital 54 715 55 178 Moses Ojeisekhoba, CEO Reinsurance 54 715 55 178 Jayne Plunkett, CEO Reinsurance Asia 43 149 44 142 Patrick Raaflaub, Group Chief Risk Officer 54 715 55 178 Edouard Schmid, Group Chief Underwriting Officer 39 678 41 962 J. Eric Smith, CEO Reinsurance Americas 46 259 44 142 Thomas Wellauer, Group Chief Operating Officer 57 825 55 178
Shareholder compensation resolutions and awarded compensation The following explanations give an overview of the applicable framework of Swiss Re Ltd’s Articles of Association based on the Ordinance, the approvals by the shareholders in the AGM 2018 of the respective motions proposed by the Board of Directors and the reconciliation of the shareholders’ resolutions with the compensation awarded in the reporting year 2018.
AGM 2018 voting results At the AGM on 20 April 2018, shareholders approved for the fourth time the maximum aggregate prospective compensation of the members of the Board of Directors (88.2% approval). Shareholders also approved for the Group EC (i) the maximum aggregate prospective fixed compensation and variable long-term compensation and (ii) the aggregate retrospective variable short-term compensation. The outcomes were 87.2% and 88.6% approval respectively. As in previous years, the 2017 Compensation Report was subject to a consultative vote and was approved by 85.9% of the shareholder votes.
At Swiss Re’s highest governance level, three Board of Directors (BoD) committees are in charge of overseeing implementation of Swiss Re’s climate change strategy. The Chairman’s and Governance Committee, steered by the Chairman, has the overall task of monitoring the Group’s strategic priorities on enabling sustainable progress, including initiatives and actions specifically addressing climate change.
Scope 1, 2 and 3 greenhouse gas emissions Reducing our carbon footprint is one of the four pillars of our climate strategy. As part of our Greenhouse Neutral Programme, we have publicly reported on our Scope 1 and 2 greenhouse gas emissions plus a major source of Scope 3 emissions (business travel) since its launch in 2003. From 2013, we have expanded our reporting to include further Scope 3 emissions (see table below).
Notes to the Group financial statements 202 Note 1 Organisation and summary of significant accounting policies 202 Note 2 Information on business segments 211 Note 3 Insurance information 221 Note 4 Premiums written 226 Note 5 Unpaid claims and claim adjustment expenses 227 Note 6 Deferred acquisition costs (DAC) and acquired present value of future profits (PVFP) 244 Note 7 Investments 246 Note 8 Fair value disclosures 254 Note 9 Derivative financial instruments 266 Note 10 Acquisitions 270 Note 11 Debt and contingent capital instruments 271 Note 12 Earnings per share 274 Note 13 Income taxes 275 Note 14 Benefit plans 278 Note 15 Share-based payments 285 Note 16 Compensation, participations and loans of members of governing bodies 287 Note 17 Related parties 288 Note 18 Commitments and contingent liabilities 289 Note 19 Significant subsidiaries and equity investees 290 Note 20 Variable interest entities 293 Note 21 Subsequent events 298 Report of the statutory auditor 299 Group financial years 2008–2017 304
Expenses Claims and claim adjustment expenses 3 –16 730 –14 855 Life and health benefits 3 –11 083 –11 769 Return credited to policyholders –3 298 1 033 Acquisition costs 3 –6 977 –6 919 Operating expenses –3 308 –3 432
Additional paid-in capital Balance as of 1 January 341 368 Impact of sale to non-controlling shareholder1 34 123 Contingent capital instrument issuance costs 8 11 Cancellation of shares bought back –85 Share-based compensation –14 –6 Realised gains/losses on treasury shares2 –1 85 Balance as of period end 368 496
In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory”, an update to topic 740, “Income Taxes”. This ASU amends the former guidance which prohibited the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset had been sold to an outside party. This new standard requires that an entity recognises the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The Group adopted ASU 2016-16 on 1 January 2018 on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the adoption date. The adoption resulted in an increase of net unrealised investment gains/losses, net of tax, of USD 44 million against a reduction of deferred tax of USD 41 million and retained earnings of USD 3 million. The movements in equity related to the adoption of ASU 2016-16 can be found in the statement of shareholders’ equity. The impact on earnings in 2018 due to the adoption of ASU 2016-16 was a tax benefit of USD 68 million.
Income before interest and income tax expense 720 355 292 1 367 Interest expenses –410 –410
3 Insurance information Premiums earned and fees assessed against policyholders For the years ended 31 December 2017 Property & Casualty Reinsurance
Acquisition costs, thereof: Gross acquisition costs with external parties –4 297 –2 277 –621 –155 –7 350 Intra-group transactions (assumed and ceded) –19 –12 19 12 0
Reinsurance recoverable on unpaid claims and policy benefits As of 31 December 2017 and 2018, the Group had a reinsurance recoverable of USD 7 942 million and USD 7 058 million, respectively. The concentration of credit risk is regularly monitored and evaluated. The reinsurance programme with Berkshire Hathaway and subsidiaries accounted for 34% and 29% of the Group’s reinsurance recoverable as of year-end 2017 and 2018, respectively.
Property & Casualty Reinsurance – Liability, non-proportional Incurred claims and allocated claim adjustment expenses, net of reinsurance
Liabilities for claims and claim adjustment expenses, net of reinsurance 1 965
Investments available-for-sale Amortised cost or cost, estimated fair values and other-than-temporary impairments of fixed income securities classified as available-for-sale as of 31 December were as follows: 2017 Amortised cost Gross unrealised Gross unrealised
Liabilities for life Fixed Other and health 2018 income Equity Derivative Investment invested Total Derivative policy Total USD millions securities securities assets real estate assets assets liabilities benefits liabilities
The significant unobservable inputs used in the fair value measurement of the Group’s weather contracts are risk margin, correlation, volatility and index value. Where the Group has a long position, a significant increase (decrease) in the risk margin input in isolation would result in a significantly higher (lower) fair value measurement. Where the Group has a long volatility or correlation position, a significant increase (decrease) in the correlation and volatility inputs would result in a significantly higher (lower) fair value measurement. Where the Group has a long index position, an increase (decrease) in the index value input in isolation would result in a significantly higher (lower) fair value measurement. Where the Group has a short position, a significant increase (decrease) in the risk margin input in isolation would result in a significantly lower (higher) fair value measurement. Where the Group has a short volatility or correlation position, a significant increase (decrease) in the correlation and volatility inputs would result in a significantly lower (higher) fair value measurement. Where the Group has a short index position, an increase (decrease) in the index value input in isolation would result in a significantly lower (higher) fair value measurement.
Derivatives not designated as hedging instruments Interest rate contracts1 48 904 524 –404 120 Foreign exchange contracts1 16 874 206 –137 69 Equity contracts1 17 135 780 –673 107 Credit contracts 4 194 1 –79 –78 Other contracts 12 432 98 –447 –349
For the year ended 31 December 2018, net operating tax losses of USD 487 million and net capital tax losses of USD 117 million were utilised.
Fair value of plan assets as of 31 December 3 760 2 336 0 6 096
Net amount recognised –61 101 –413 –373 2018 USD millions Swiss plan Foreign plans Other benefits Total
Effect of settlement, curtailment and termination 61 61 Exchange rate gain/loss recognised during the year 34 34
Assets measured at fair value For a description of the different fair value levels and valuation techniques see Note 8 “Fair value disclosures”.
Expected contributions and estimated future benefit payments The employer contributions expected to be made in 2019 to the defined benefit pension plans are USD 122 million and to the post-retirement benefit plan are USD 17 million.
Leadership Performance Plan The Leadership Performance Plan (LPP) awards are expected to be settled in shares, and the requisite service as well as the maximum contractual term are three years. For LPP 2015, LPP 2016, LPP 2017 and LPP 2018 awards, an additional two-year holding period applies for all members of the Group EC and other key executives. At grant date, the award is split equally into two underlying components — Restricted Share Units (RSUs) and Performance Share Units (PSUs). The RSUs are measured against a return on equity performance condition and will vest within a range of 0–100%. The PSUs are based on relative total shareholder return, measured against a pre-defined group of peers and will vest within a range of 0–200%. The fair values of both components are measured separately, based on stochastic models.
Luxembourg iptiQ Life S.A., Luxembourg EUR 6 100 f Swiss Re Europe Holdings S.A., Luxembourg EUR 105 100 f Swiss Re Europe S.A., Luxembourg EUR 350 100 f Swiss Re Funds (Lux) I, Senningerberg1 EUR 13 271 100 f Swiss Re International SE, Luxembourg EUR 182 100 f
United States Claret Re Inc., Burlington USD 5 100 f Facility Insurance Holding Corporation, Dallas USD 0 100 f First Specialty Insurance Corporation, Jefferson City USD 5 100 f North American Capacity Insurance Company, Manchester USD 4 100 f North American Elite Insurance Company, Manchester USD 4 100 f North American Specialty Insurance Company, Manchester USD 5 100 f Pecan Re Inc., Burlington USD 5 100 f Pillar RE Holdings LLC, Wilmington USD 0 100 f SR Corporate Solutions America Holding Corporation, Wilmington USD 0 100 f Sterling Re Inc., Burlington USD 213 100 f Swiss Re America Holding Corporation, Wilmington USD 0 100 f Swiss Re Capital Markets Corporation, New York USD 0 100 f Swiss Re Corporate Solutions Global Markets Inc., New York USD 0 100 f Swiss Re Financial Markets Corporation, Wilmington USD 0 100 f Swiss Re Financial Products Corporation, Wilmington USD 0 100 f Swiss Re Life & Health America Holding Company, Wilmington USD 0 100 f Swiss Re Life & Health America Inc., Jefferson City USD 4 100 f Swiss Re Management (US) Corporation, Wilmington USD 0 100 f Swiss Re Risk Solutions Corporation, Wilmington USD 0 100 f Swiss Re Treasury (US) Corporation, Wilmington USD 0 100 f Swiss Reinsurance America Corporation, Armonk USD 10 100 f Washington International Insurance Company, Manchester USD 4 100 f Westport Insurance Corporation, Jefferson City USD 6 100 f
Report of the statutory auditor on the consolidated financial statements As statutory auditor, we have audited the accompanying consolidated financial statements of Swiss Re Ltd and its subsidiaries (the ‘Company’), which comprise the consolidated balance sheet as of 31 December 2018, and the related consolidated income statement, statement of comprehensive income, statement of shareholders’ equity, statement of cash flows and notes for the year ended 31 December 2018.
Involving our life insurance actuarial specialists to perform independent model validation procedures, including detailed testing of models, independent recalculations and back testing.
Income before income tax expense 4 059 3 078 Income tax expense –16 –1
Swiss Reinsurance Company Ltd Zurich CHF 34.4 100 100 Swiss Re Corporate Solutions Ltd Zurich CHF 100.0 100 100 Swiss Re Life Capital Ltd Zurich CHF 0.1 100 100 Swiss Re Investments Holding Company Ltd Zurich CHF 0.1 100 100 Swiss Re Principal Investments Company Ltd Zurich CHF 0.1 100 100 Swiss Re Management Ltd Zurich CHF 0.1 100 100 Swiss Re Specialised Investments Holdings (UK) Ltd London GBP 1.0 100 100
In June 2018, the Company issued a six-year senior unsecured exchangeable instrument with issuer stock settlement. The instrument has a face value of USD 500 million, with a fixed coupon of 3.25% per annum payable semi-annually in arrear until the maturity date (13 June 2024).
Own shares held by subsidiaries 178 233 162 487 Own shares held by Swiss Re Ltd directly 33 915 601 34 704 029
Voluntary profit reserves brought forward 14 305 16 797 Allocation from retained earnings 4 043 3 077 Ordinary dividend payment out of voluntary profit reserves –1 5511 –1 6802
2 The Board of Directors’ proposal to the Annual General Meeting of 17 April 2019 is based on the number of shares eligible for dividend as of 31 December 2018. The actual dividend payment will depend on the number of shares eligible for dividend as of 18 April 2019.
EVM profit is a risk-adjusted measure of performance that can be compared across all business activities.
Risk arising from failure of operational processes, internal procedures and controls leading to financial loss.