SSREF - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, welcome to the first quarter 2022 Media Conference Call. I'm Alisey Chorus Call operator. [Operator Instructions]. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Elena Logutenkova, Head of Media Relations and Corporate Reporting. madam. ahead, go Please

Elena Logutenkova

a good your Media Welcome with Conference Dacey, be give CFO, and first, our First then John, and our Swiss over Quarter John we'll you will he Results Call. to and overview morning, you, of to results take everyone. happy Re's group brief questions. Thank I'm you. here to

John Dacey

to and Elena, you, everyone. good morning Thank

loss one, reported quarter first of net $XXX The a we and several headwinds been challenging XXXX faced where a group of million. has

While some such the invasion impacted been in as of We the as challenges the Ukraine this us. by our Russia's directly including came end extend the all we those COVID-XX, a sincere of who anticipated many, to war. the shock of February have continued quarter, impact of to at from sympathies

a the of war on results degree related spend potential regards economic me Swiss war events. in There's to before moment of a on related Re's from look this very and high reinsurers at with overall. the impact the Let uncertainty insurers we impacts

seen far, actual so hardly any have we claims. And

to we affected We lines, catastrophe share cover normal we that $XXX Based reserves significant war ultimate Ukraine to businesses to to cautious P&C loss our information, our Re, estimate specialty exposures position. and outsized already from on we our and underwriting Reinsurance results. in the of do Nevertheless, large disclosed and continue Swiss in should in approach, not for underweight have the in catastrophe similar could Casualty market a the the deliver market Despite of the decided million and to -- related the quarter. proactive to exposures in our the total events. natural Ukraine the have made claims, natural When any quarter ultimate the industry Property relative we've and outside industry, on be Russia. both of an some that a believe current reserves it a market we robust loss impact continued this technical last first we covering in Day midsized to war, dimension believe and Investor as month booked take these higher-than-expected reserves portion at comes

Our profitable first with capital very the premiums remained fee group billion target opportunities for range growth the $XX.X to enables in Net strong, million in our ratio supportive XXXX, X% and half position renewals we attractive $XXX the achieved SST of Xst in to the This to environment. in pricing of quarter $XXX the capture on income us earned as April. and upper increased of by a group year-to-date. growth million

in first according through to Our standards, the GAAP quarter P&L investment accounting we peers. results U.S. the were the equity by which of book have movements, than different most mark-to-market impacted European-based negative to our

income at rates and term. from X.X%, remained we quality of expect investment benefit furthermore, However, recurring in our asset rising the yield And stability portfolio. to interest medium our the results demonstrating the

of $XXX of $XXX Starting the with the businesses. $XXX million Re, the same in losses as These cat for Ukraine net underwriting elevated quarter period million of war. in million a to XXXX. partially Now as the underlying strong income P&C with $XX for results individual of let's of technical first income reported offset nat reserves reflected performance results which the compared turn net large which the for a million business, the well

well X.X% continued achieved. volume results significantly we've net reported business as due growth year-on-year the earned price to losses the equities. the In lower market on as addition, value premiums time, At by the investment the same rose reflecting increases

good combined first the combined efficiency. improve achieved achieved cost grew growth business price at assumptions On driven fully the basis, experienced more with the year. treaty was focused increase full on a X%. business P&C period Re XXXX achieved a XX.X% and other Re increased year On This Reflecting inflation. April X%, XX.X%, of ratio among year-to-date same this as premium the XXXX. at achieving remains P&C for a renewals. to $X.X its volume with less also P&C by, in the This to continued up ratio XX.X% offsets Re at conservative business increases ratio billion the a by target was loss the total quarter, represented was XX% normalized of XX% premiums of volumes and the basis, in volume increased than from stable things, last that renewal. renewed in treaty for results compared normalized Importantly, headwinds combined contracts which the

of X the in to Turning year, increases reflecting a the the the time, excess mortality million first $XX million This million while At in year rose moderate to $XXX the profit of income we months quarter. approximately the business earned reflected XX.X% the the at months to Re. in excess unit in robust the million Corporate natural results. net a expectations. results. the higher-than-expected lower reserves Health Ukraine previously grow reported in continue of United down $X.X to period. of $XXX from high losses business. months end the the decrease the claims to by performance Corporate we're segment of Solutions, business lower XXXX, for portfolios. billion of offset X a as higher business driven $XXX trending delivering other for Nevertheless, through, & In related impacts. of the is & after loss year, even of and The first in of key combined solid net million to and Health its quarter improved net Life continued Corporate encouraged prior investment related as focused Solutions unit the continues the charge point COVID-XX of the Life Re a war, target remain only primarily percentage X ratio year business of as by States well $XXX full The catastrophe target earn war. rate income Ukraine to combined This XX%. first as ratio reported moderate XX.X% remains X the reserves new $XX focused XXXX. to on than first its Solutions COVID-XX and same in first a And its the underwriting less the underlying realized the the achieved significantly, markets investment of premiums result net during million recorded performance impact with of U.S. the mortality continued Overall,

with Finally, the the This is prior that, in against businesses are the to all dynamic headwinds turn remain of experienced the XXXX, of we focused the first also iptiQ primarily like to confident its and business executing strategy. we on Elena. of premiums positioned first iptiQ past due written business. delivering on let me to touch Casualty strong our have To we its gross implemented performance trajectory. results. strongly Compared continued We Thanks our substantial and $XXX group growth year period, that the on increases have by are In Property XX% million. up, quarter to to with sum are I'd perform our back well over years, the targets. quarter XXXX. And the financial to focused strategic actions

Elena Logutenkova

We'll Operator, the take John. question, you, we could lines the Thank open please? now for first questions.

Operator

Instructions]. [Operator

line first Our of S&P the with from question Market Dyson Global comes Ben Intelligence.

Ben Dyson

lines the if how effects you [indiscernible] if down? million break I -- of could business the so, you was in reserves in much you from was if particular, what wondering $XXX And for the wondering the aircraft losses? And if Ukraine could covered. that mentioned you I there was leasing anything could war. if there, say that

John Dacey

high. So the question. thanks losses of Ben, remains on remind the very, Again, I'd people uncertainty these for that level very

assess and relevant represent outcome lines of other to do understood, X the have and marine, but book and reserves the we've determining risk. specific Re, we've also Those a $XXX series been as associated as which be. that ultimate the likely political of Swiss specific of of review not what portion for high be Again, our well in actual of and significant include the surety, is teams million. working a damages on the in leave the both, we've to worst wording night a potentially as built business. these level Across the scenario businesses, scenarios credit own provisions treaties we with insured violence. scenario, the aviation, will best scenarios. us numbers for think what but scenario, These for loss what aviation include today. And not decided uncertainty, We've done on political business is those risk economic with of is lines a loss to day and it the what Our of

Operator

from The with next question the comes AWP. [ph] of Hoffman line Mark

Unidentified Analyst

on losses a with question will looking manage the to How then when you're step Are you also every you forward in the cat maybe mentioned were figure Where of you situation? other quarter, nat next will Yes, analyzing this will to uncertainties the do midsized quarter, thinking event? Ukraine. you event. occur? losses this these nat a a see is you that they do you Yes. you And like midsized cat

John Dacey

Sure.

very this week-by-week. obviously -- our the followed by will be a closely which issue teams So is

today. our I we understand think potential the where -- we believe are exposures

would is book that say the that the if of I some evaluate failed nature we'd say have continues, taken explain of portion But of longer have that credit the we we reiterate that And businesses them of loss with And the information will we business. the the the insurance book have losses the We them. on the we've likely this a is loss. see in basis. fairly right continuation lines insured need we feel war to sense surety, to expect example affected of now, positions, we as is a and that more I significant I What to areas. some can might where in we currently. I'd and result quarter-by-quarter the a further will, larger is What be in likely good think

what about be, at the question billion. around a Day, focused loss cat of $XX gave guess we're would Investor I an examples Your the we midsized industry

lower end and a billion $XX and be say towards change, can billion. midsize I between of mentioned that see for that plays as in probably time, would out. But we'll this $XX a we'd the somewhere how moment, I I What market be the is range itself at think loss. over range loss can a

Operator

The of next question comes [indiscernible]. the from line

Unidentified Analyst

please Can this as I I I million far in ask -- well, as understand is to understood. $XXX relation war the the reserves in you to Ukraine

reserves lines me. for business quick different the too bit a allocated are mentioned was where these It being You to.

and COVID like the you maybe be second So have which I is these list. where -- nat occurred? you invite losses can would losses, specific And more to losses losses repeat that cat bit question these about a in businesses, to

John Dacey

Happy Sure. to a through slower. walk little

also It that exposures currently losses is related related is Swiss insurance political of as which aircraft operations CorSo to direct very for owned includes through lines the to which specialist and this some businesses, violence, to related specific of X of companies. surety, aviation-related port -- Ukraine. some lines insured would that player which which reinsurer, no aircraft, write more political would potentially but delivery business. minor to might subsector Russia, that Russia goods with Swiss be X and also likely relatively the is operations, I'm exposure Re the the and companies cover on losses, or that the some has our marine credit potentially aware a in So non-Russian these and a and It are largely by leased a include Re primary insurance, and due -- and but are in have actually risks vessels, in

the all the been are actual would uninsured. that's by massive property wartime losses buildings, terms activities. for seen in in There the Ukraine infrastructure insurance we've is those the potential the So Unfortunately, exclusions almost the for all be war us. of that property lines damaged any destruction for

X million were were distinct X in In to country floods major European Benelux, large second for well, $XXX on actually business. our about the an separately, of larger that for Germany, also February, and Northern well. Europe, the Australia the parts think, cats for quarter. resulted loss March that number -- nat affected sources as coming and Your there of I And losses question even storms the out that a devastating February the in, important U.K. of

third... And but Re's there had of portfolio. smaller at I So think I X a the Swiss were significant the couple least other for those you events, apologize, a ones were

Unidentified Analyst

COVID-XX. Yes.

John Dacey

largely world. for recognized in $XXX Africa, There India, but so per in the COVID, but U.K. on the Day first we're anticipated, numbers first And and minor significant January, now was little daily in But the we the driven a peaked above we've gone a the this, up. the dramatically we losses in a to are the That fallen the is day, added by both February million XX%. first U.S.-based. entire at where we to of X,XXX quarter, South loss. that about total quarter as comparison as were It again, quarter wave COVID like our COVID the early United the other also per attributed that even deaths were XXX States up of of has So through down country, results, added by day. XX% talked said, expect to Investor about with jurisdictions losses about year-end the about deaths we reduction Omicron rest these the

Unidentified Analyst

day in -- figure the X,XXX now February, has back the February, So deaths XXX. per was and down in to it's come

John Dacey

Yes.

So end States. first the think, and And of end high of X was our but surprisingly months be, I think cost I But mortalities of that's, will the a ultimate the the what probably actual these fair made was. actually teams in peak when estimates have -- losses expectation the United what up. January some was were will it

Unidentified Analyst

for And $XXX million, Okay. the Ukraine is reserve right?

John Dacey

yes. correct, That's

Operator

[indiscernible]. question line The next from of comes the Patrick

Unidentified Analyst

future you some where in need certain Do lines? one lines, especially your at Maybe point inflation. that strengthen to the word for be you long tail reserves to regarding expect

John Dacey

created industry. we Patrick, for a disruptions lines in like are our clearly and potential for monitoring the We've costs parts of replacement actually, some chain very inflation So replacement for loss closely in supply the seen is have spike things business, of There impact losses. impact a automobiles insured at cars. negative already some the

say a the reserves, year businesses. You components reserves anticipated see carriers. in by redundancies primary the moves can way from we've We of is tail I made for this this in inflation where increased What already the results lines. some had longer our back of inflation in where regimes. of XXXX, some on and we places increased the XXXX We've other funded of along solvency that during we've lines

required did increased -- that what evaluate claims in we're modestly we and any is We positive parts we're be see year a reinsurance, continue find further comfortable. reserves particular to our need I adequate our to for reserves you prior to continue prices flat as impact Corporate And say XXXX, capabilities to in can to group. our were the we would what inflationary What dramatic our our expectation other enough costing development first without and sure adjustments, to do able redundancy need through are Solutions. aggressively reserves will likely where make is on in in adjust quarter, cost, to if for to as cycle. of of the be refer manage might in this moment, we be this At the we or

Operator

[indiscernible]. The of the next from question [indiscernible] comes Bloomberg line with

Unidentified Analyst

I a question just more on potential bit a and -- broadly impact. the had the industry, further more

how is come would yesterday, there That's EU, your to this I this Russian the forward? of discussion something insurance. in oil due for current the month. was business by of reserve. proposed you've So calculation factored on -- next was And the going effect wondering potential the into ban ban your in, impact And shipping also

John Dacey

in response to war, related the authorities those question. and coverage. the the sanctions to is guess responding degree as the in sanctions Re Swiss extend relevant is, place I group are the that all honoring first Thanks a for putting of clearly my

degree we with material or which to would oil, related comply come by that the such respect which not to you that would the gas will -- material. I If whether with marine-related said Swiss reduction We that not would Having a the the continue them and got of any insurance, Re. the be would for is think sanctions we've insurance unambiguously. that, for revenues, transmission be it's a be complying policies mentioned, issue energy, or specific early

Operator

Instructions].The next comes Paul the line Reuters. of from question [Operator Arnold with

Unidentified Analyst

end higher were full risk upper catastrophes Any war a by second connection when maybe for anticipated question, be payments [indiscernible] at how QX third expectations, claims in in much you your the as QX? in of you? higher payments a that the year after the previously expect used natural one. And so, is you in there or with first of the than And up have if idea to COVID-related Ukraine? And much? budget already will said, how significantly the by claims,

John Dacey

So a than little to COVID, respect QX correctly might bigger out, we have as pointed the with you was expected. probably

We expected something large.

development is just following been watch deaths jurisdictions, of we to United sharp the so in to what we need look the in the And we States. I and -- mortality. are has which What some ahead U.S. see wave months. wait at all the other cause when we And say of actually will the ways in refer in the decline --

total weeks to deaths in deaths to the of same expected from So years number actually number of be the the months same below. or compared recent

States, year exactly the then the -- additional does, and of little, will very we U.K. the lower in is might years. mortality QX, the XXXX been And average all numbers where development. think the United I this in expected cause than will and show is replicated the can't this COVID it follow the if has So then by claims. in same of in have what presume if recent But example that pre-COVID half been second

this will The second closely. just have we'll quarter some, monitor very and

return right and profit million full and positioning. Re remains Life we'll in quarter differently. $XXX end looks that with now, provide the is view year, us we But the And the for result earnings of second think likely & our deaths update an of business from to the the is attainable, is to our you opportunity the the achievable $XXX falloff COVID-related So own if I Health to apologize. million

You -- I didn't hear them.

Elena Logutenkova

Our claims Nat cat budget? versus

John Dacey

Right.

-- increased modest is, tends the and normally and of this heavier quarters much a what So fairly exposures the second half in of the which is of of season be first on built we second the year, we purposely the year that the in hurricane the budget in to because cat, XXXX. We've year, increase in -- therefore, loads quarter, including budget, third States. partly in any United expect the nat our

the is budget for $X.X So billion year. the overall

the of that you're sort this certainly fact better, year. So Obviously, the than better. finish losses But we've above volatile likely but overly in for definition, by fairly a is less you had expected concern start us to doesn't XX%, off QX, full if mix.

have seasonality that year. the we're losses absorb of means budgeting room the sufficient course into So we comfortable our to put we that additional during that the

off heavy really somewhat our return on quarter doesn't still reasons full any And equity believe the the that's XX% dramatic why also So us. of -- first year valid for one that we fashion maintain throw here. we in us target is

Elena Logutenkova

And what first Ukraine. from do [indiscernible] we expect

John Dacey

for their on that. companies of reinsurance There's -- managed We I do their -- that asked to covers. just think the during was notifications, but to have and quarter, through about of third expect assessments course and the -- to assessments insured to come in? when the we we'll really also been of I So claims a are an second primary the wait claims make own actually people own loss you will try side, some reminded,

number responsible. sanctions for been the be there nature whether you're contracts, remains important be of is the loss will but terms who's that out been is presented, to of has whether have also to very and the some of there insurance timing the the probably imposed accepted aware, the complicated. cover coverage. of sort which if an to evaluation they're people going a loss are to As or It a related have canceled, of claims And in enormously loss not and legitimacy of just real even there

Operator

Mr. from Your Ben Intelligence. with Dyson next question S&P Global is Market a follow-up

Ben Dyson

of or that, whether catastrophe could how if also June the and difficulties looking wondering going X it's exposure specially in generally Just you're that to in at it insurers details more just to Re you a having capacity. give are there there's Florida on there? going might play given write Florida, the nat given moment. that And interested how the financial shortage And sort Swiss approach in I grow increase cat renewals, of is that any to the particularly

Christian Mumenthaler

question, for Thanks Ben. the

times historically, we I appropriate. are has of this that believe for risks some a in been underweight And the state do the of have mentioned been systematically actual for why think rates Florida the I've market loss the required underpriced that number risk. that's We are exposures. and we've not

what view business and then that market there. don't of we're think will for what judge that what in price the at prepared we we'll risks that fairly moderate But I the is market. Re of There you fraud, and current state is are think require been address. pricing are, to If but not for in which do accept has continue there adequate. the if write laid Swiss the any optimistic these risk And rates. -- prices potential to to that will be losses inflated find the write issues our What we will are, finally that market, the looking only bear important we have is to to see loss so around I real related but have costs, apparently is there I seasons legislature fact adjustments. adequate adequate hurricane we been think claims will in, we come expected --

Operator

There this at questions more time. Instructions]. no are [Operator

Elena Logutenkova

All today, day. you a Thanks. everyone, very wish much, nice for you participating right. we Thank and

John Dacey

you. Thank

Operator

for choosing now Ladies and thank for over. and in the is conference Call, you Thank you gentlemen, the Chorus participating conference.

Goodbye. may your now disconnect lines. You

Swiss Re (SSREF) 8 May 222022 Q1 Earnings call transcript