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17 Information on business segments

The Group provides reinsurance and insurance throughout the world through its business segments. The business segments are determined by the organisational structure and by the way in which management reviews the operating performance of the Group.

The Group presents four core operating business segments: Property & Casualty Reinsurance, Life & Health Reinsurance, Corporate Solutions and Admin Re®. The presentation of each segment’s balance sheet is closely aligned to the segment legal entity structure. The assignment of assets and liabilities for entities that span more than one segment are determined by considering local statutory requirements, legal and other constraints, the economic view of duration and currency requirements of the reinsurance business written, and the capacity of the segments to absorb risks. Interest expense is incurred from the segment’s capital funding position. The tax position of the operating segments is derived from legal entity tax obligations, subject to Group tax considerations.

Accounting policies applied by the business segments are in line with those described in the summary of significant accounting policies (please refer to Note 1 to the Group’s annual consolidated financial statements).

The Group operating segments are outlined below.

Property & Casualty Reinsurance and Life & Health Reinsurance

Reinsurance consists of two segments, Property & Casualty and Life & Health. The Reinsurance Business Unit operates globally, both through brokers and directly with clients, and provides a large range of solutions for risk and capital management. Clients include insurance companies and mutual as well as public sector and governmental entities. In addition to traditional reinsurance solutions, the Business Unit offers insurance-linked securities and other insurance-related capital market products in both Property & Casualty and Life & Health.

Property & Casualty includes the business lines property, casualty including motor, and specialty. Life & Health includes the life and health sub-segments.

Corporate Solutions

Corporate Solutions offers innovative insurance capacity to mid-sized and large multinational corporations across the globe. Offerings range from standard risk transfer covers and multi-line programmes, to customised solutions tailored to the needs of clients. Corporate Solutions serves customers from over 40 offices worldwide.

Admin Re®

Through Admin Re®, Swiss Re acquires closed blocks of in-force life and health insurance business, either through reinsurance or corporate acquisition, and typically assumes responsibility for administering the underlying policies. The administration of the business may be managed directly or, where appropriate, in partnership with a third party. Since 1998, Swiss Re has acquired more than 50 blocks of business spanning a range of product types. It currently operates in the UK, US and the Netherlands.

Group items

Items not allocated to the business segments are included in the “Group items” column, which encompasses Swiss Re Ltd, the Group holding company, the former Legacy business in run-off, Principal Investments and certain Treasury units. The holding company charges trademark licence fees to the operating segments which are reported as other revenues. Certain administrative expenses of the corporate centre functions that are not recharged to the operating segments are reported as Group items.

Consolidation

Segment information is presented net of external and internal retrocession and other intra-group arrangements. The Group total is obtained after elimination of intra-group transactions in the “Consolidation” column. This includes significant intra-group reinsurance arrangements, recharge of trademark licence fees, and intersegmental funding.

a) Business segments – income statement

For the year ended 31 December

Download

2012
USD millions

Property & Casualty Reinsurance

Life & Health Reinsurance

Corporate Solutions

Admin Re®

Group items

Conso­lidation

Total

Revenues

 

 

 

 

 

 

 

Premiums earned

12 329

9 050

2 284

992

6

 

24 661

Fee income from policyholders

 

72

 

713

 

 

785

Net investment income – non-participating

1 451

1 365

109

1 548

18

–18

4 473

Net realised investment gains/losses – non-participating

259

562

142

–89

73

 

947

Net investment result – unit-linked and with-profit

 

222

 

2 348

 

 

2 570

Other revenues

95

1

1

3

385

–297

188

Total revenues

14 134

11 272

2 536

5 515

482

–315

33 624

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

Claims and claim adjustment expenses

–6 306

 

–1 448

 

–14

5

–7 763

Life and health benefits

 

–6 787

 

–2 086

 

–5

–8 878

Return credited to policyholders

 

–271

 

–2 688

 

 

–2 959

Acquisition costs

–2 316

–1 787

–300

–142

–3

 

–4 548

Other expenses

–1 325

–833

–449

–457

–403

250

–3 217

Interest expenses

–111

–586

 

–53

–51

65

–736

Total expenses

–10 058

–10 264

–2 197

–5 426

–471

315

–28 101

 

 

 

 

 

 

 

 

Income before income tax expense

4 076

1 008

339

89

11

0

5 523

Income tax expense/benefit

–934

–231

–143

101

82

 

–1 125

Net income before attribution of non-controlling interests

3 142

777

196

190

93

0

4 398

 

 

 

 

 

 

 

 

Income attributable to non-controlling interests

–134

 

 

–7

 

 

–141

Net income after attribution of non-controlling interests

3 008

777

196

183

93

0

4 257

 

 

 

 

 

 

 

 

Interest on contingent capital instruments

–18

–38

 

 

 

 

–56

Net income attributable to common shareholders

2 990

739

196

183

93

0

4 201

 

 

 

 

 

 

 

 

Claims ratio in %

51.2

 

63.4

 

 

 

53.1

Expense ratio in %

29.5

 

32.8

 

 

 

30.0

Combined ratio in %

80.7

 

96.2

 

 

 

83.1

Management expense ratio in %

 

7.9

 

 

 

 

 

Operating margin in %

 

8.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013
USD millions

Property & Casualty Reinsurance

Life & Health Reinsurance

Corporate Solutions

Admin Re®

Group items

Consoli­dation

Total

Revenues

 

 

 

 

 

 

 

Premiums earned

14 542

9 967

2 922

844

1

 

28 276

Fee income from policyholders

 

56

 

486

 

 

542

Net investment income – non-participating

1 098

1 442

98

1 180

150

–21

3 947

Net realised investment gains/losses – non-participating

184

269

150

201

–38

 

766

Net investment result – unit-linked and with-profit

 

249

 

3 098

 

 

3 347

Other revenues

61

 

2

1

307

–347

24

Total revenues

15 885

11 983

3 172

5 810

420

–368

36 902

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

Claims and claim adjustment expenses

–7 884

 

–1 773

 

2

 

–9 655

Life and health benefits

 

–8 075

 

–1 506

 

 

–9 581

Return credited to policyholders

 

–286

 

–3 392

 

 

–3 678

Acquisition costs

–2 761

–1 698

–406

–30

 

 

–4 895

Other expenses

–1 472

–946

–601

–441

–356

308

–3 508

Interest expenses

–207

–544

–1

–46

–22

60

–760

Total expenses

–12 324

–11 549

–2 781

–5 415

–376

368

–32 077

 

 

 

 

 

 

 

 

Income/loss before income tax expense

3 561

434

391

395

44

0

4 825

Income tax expense/benefit

–249

–30

–111

28

50

 

–312

Net income/loss before attribution of non-controlling interests

3 312

404

280

423

94

0

4 513

 

 

 

 

 

 

 

 

Income attributable to non-controlling interests

–1

 

–1

 

 

 

–2

Net income/loss after attribution of non-controlling interests

3 311

404

279

423

94

0

4 511

 

 

 

 

 

 

 

 

Interest on contingent capital instruments

–19

–48

 

 

 

 

–67

Net income/loss attributable to common shareholders

3 292

356

279

423

94

0

4 444

 

 

 

 

 

 

 

 

Claims ratio in %

54.2

 

60.6

 

 

 

55.3

Expense ratio in %

29.1

 

34.5

 

 

 

30.0

Combined ratio in %

83.3

 

95.1

 

 

 

85.3

Management expense ratio in %

 

8.3

 

 

 

 

 

Operating margin in %

 

5.2

 

 

 

 

 

Business segments – balance sheet

As of 31 December 2012

Download

2012
USD millions

Property & Casualty Reinsurance

Life & Health Reinsurance

Corporate Solutions

Admin Re®

Group items

Consoli­dation

Total

1

The Group updated its balance sheet presentation of deferred tax assets and liabilities. Deferred tax assets and liabilities are presented on a gross basis as per the first quarter 2013. The comparative period has been adjusted accordingly and is consistent with the relevant income tax disclosure in the notes to the financial statements in the prior year.

Assets

 

 

 

 

 

 

 

Fixed income securities

31 115

31 366

4 616

21 608

143

 

88 848

Equity securities

2 360

303

578

3

530

 

3 774

Other investments

11 893

3 178

107

1 774

6 180

–7 088

16 044

Short-term investments

10 005

5 053

1 549

1 557

481

 

18 645

Investments for unit-linked and with-profit business

 

842

 

24 659

 

 

25 501

Cash and cash equivalents

6 904

1 412

978

1 472

71

 

10 837

Deferred acquisition costs

1 103

2 713

219

2

2

 

4 039

Acquired present value of future profits

 

1 358

 

1 665

 

 

3 023

Reinsurance recoverable

5 583

2 447

9 440

469

 

–7 830

10 109

Other reinsurance assets

12 419

8 631

2 901

3 459

3

–2 639

24 774

Goodwill

2 018

2 057

17

 

 

 

4 092

Other1

10 059

4 554

927

1 165

132

–5 020

11 817

Total assets

93 459

63 914

21 332

57 833

7 542

–22 577

221 503

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Unpaid claims and claim adjustment expenses

48 465

9 505

12 258

1 247

21

–7 826

63 670

Liabilities for life and health policy benefits

 

17 439

216

18 469

 

–7

36 117

Policyholder account balances

 

1 466

 

27 883

 

 

29 349

Other reinsurance liabilities

12 543

1 709

4 913

713

8

–3 106

16 780

Short-term debt

3 799

1 529

 

634

1 245

–3 595

3 612

Long-term debt

3 779

12 461

 

 

46

 

16 286

Other1

12 503

11 466

903

2 225

2 562

–7 996

21 663

Total liabilities

81 089

55 575

18 290

51 171

3 882

–22 530

187 477

 

 

 

 

 

 

 

 

Shareholders’ equity

12 356

8 339

3 032

6 662

3 660

–47

34 002

 

 

 

 

 

 

 

 

Non-controlling interests

14

 

10

 

 

 

24

Total equity

12 370

8 339

3 042

6 662

3 660

–47

34 026

 

 

 

 

 

 

 

 

Total liabilities and equity

93 459

63 914

21 332

57 833

7 542

–22 577

221 503

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2013
USD millions

Property & Casualty Reinsurance

Life & Health Reinsurance

Corporate Solutions

Admin Re®

Group items

Consoli­dation

Total

Assets

 

 

 

 

 

 

 

Fixed income securities

24 986

29 588

4 644

20 014

64

 

79 296

Equity securities

4 017

1 333

981

 

1 360

 

7 691

Other investments

10 080

3 179

169

1 800

5 561

–5 905

14 884

Short-term investments

13 297

4 113

1 595

1 474

510

 

20 989

Investments for unit-linked and with-profit business

 

988

 

26 227

 

 

27 215

Cash and cash equivalents

5 288

166

562

1 748

308

 

8 072

Deferred acquisition costs

1 591

2 845

319

1

 

 

4 756

Acquired present value of future profits

 

1 451

 

2 086

 

 

3 537

Reinsurance recoverable

4 752

1 756

8 228

323

 

–6 732

8 327

Other reinsurance assets

11 457

9 286

2 422

3 475

3

–1 967

24 676

Goodwill

2 057

2 035

17

 

 

 

4 109

Other

8 938

3 759

988

919

207

–4 843

9 968

Total assets

86 463

60 499

19 925

58 067

8 013

–19 447

213 520

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Unpaid claims and claim adjustment expenses

45 578

9 869

11 549

1 205

15

–6 732

61 484

Liabilities for life and health policy benefits

 

17 392

232

18 415

 

–6

36 033

Policyholder account balances

 

1 595

 

29 582

 

 

31 177

Other reinsurance liabilities

11 591

2 116

4 355

620

6

–2 433

16 255

Short-term debt

798

3 730

 

646

1 285

–2 641

3 818

Long-term debt

4 700

10 627

 

 

 

–605

14 722

Other

10 523

8 940

1 010

1 795

1 775

–6 989

17 054

Total liabilities

73 190

54 269

17 146

52 263

3 081

–19 406

180 543

 

 

 

 

 

 

 

 

Shareholders’ equity

13 256

6 230

2 771

5 804

4 932

–41

32 952

 

 

 

 

 

 

 

 

Non-controlling interests

17

 

8

 

 

 

25

Total equity

13 273

6 230

2 779

5 804

4 932

–41

32 977

 

 

 

 

 

 

 

 

Total liabilities and equity

86 463

60 499

19 925

58 067

8 013

–19 447

213 520

b) Property & Casualty Reinsurance business segment – by line of business

For the year ended 31 December

Download

2012
USD millions

Property

Casualty

Specialty

Total

Premiums earned

5 795

4 630

1 904

12 329

 

 

 

 

 

Expenses

 

 

 

 

Claims and claim adjustment expenses

–2 832

–2 818

–656

–6 306

Acquisition costs

–781

–1 128

–407

–2 316

Other expenses

–687

–406

–232

–1 325

Total expenses before interest expenses

–4 300

–4 352

–1 295

–9 947

 

 

 

 

 

Underwriting result

1 495

278

609

2 382

 

 

 

 

 

Net investment income

 

 

 

1 451

Net realised investment gains/losses

 

 

 

259

Other revenues

 

 

 

95

Interest expenses

 

 

 

–111

Income before income tax expenses

 

 

 

4 076

 

 

 

 

 

Claims ratio in %

48.9

60.9

34.4

51.2

Expense ratio in %

25.3

33.1

33.6

29.5

Combined ratio in %

74.2

94.0

68.0

80.7

 

 

 

 

 

 

 

 

 

 

2013
USD millions

Property

Casualty

Specialty

Total

Premiums earned

6 945

5 366

2 231

14 542

 

 

 

 

 

Expenses

 

 

 

 

Claims and claim adjustment expenses

–3 342

–3 563

–979

–7 884

Acquisition costs

–883

–1 408

–470

–2 761

Other expenses

–764

–495

–213

–1 472

Total expenses before interest expenses

–4 989

–5 466

–1 662

–12 117

 

 

 

 

 

Underwriting result

1 956

–100

569

2 425

 

 

 

 

 

Net investment income

 

 

 

1 098

Net realised investment gains/losses

 

 

 

184

Other revenues

 

 

 

61

Interest expenses

 

 

 

–207

Income before income tax expenses

 

 

 

3 561

 

 

 

 

 

Claims ratio in %

48.1

66.4

43.9

54.2

Expense ratio in %

23.7

35.5

30.6

29.1

Combined ratio in %

71.8

101.9

74.5

83.3

c) Life & Health Reinsurance business segment – by line of business

For the year ended 31 December

Download

2012
USD millions

Life

Health

Total

1

Operating margin is calculated as operating income divided by total operating revenues. Total operating revenues are total revenues excluding unit-linked and with-profit revenues.

Revenues

 

 

 

Premiums earned

6 176

2 874

9 050

Fee income from policyholders

72

 

72

Net investment income – non-participating

899

466

1 365

Net investment income – unit-linked and with-profit

32

 

32

Net realised investment gains/losses – unit-linked and with-profit

190

 

190

Net realised investment gains/losses – insurance-related derivatives

–147

 

–147

Other revenues

1

 

1

Total revenues before non-participating realised gains/losses

7 223

3 340

10 563

 

 

 

 

Expenses

 

 

 

Life and health benefits

–4 625

–2 162

–6 787

Return credited to policyholders

–271

 

–271

Acquisition costs

–1 299

–488

–1 787

Other expenses

–613

–220

–833

Total expenses before interest expenses

–6 808

–2 870

–9 678

 

 

 

 

Operating income

415

470

885

 

 

 

 

Net realised investment gains/losses – non-participating and excluding insurance-related derivatives

 

 

709

Interest expenses

 

 

–586

Income before income tax expenses

 

 

1 008

 

 

 

 

 

 

 

 

Management expense ratio in %

8.6

6.6

7.9

Operating margin1 in %

5.9

14.1

8.6

 

 

 

 

 

 

 

 

2013
USD millions

Life

Health

Total

Revenues

 

 

 

Premiums earned

6 678

3 289

9 967

Fee income from policyholders

56

 

56

Net investment income – non-participating

915

527

1 442

Net investment income – unit-linked and with-profit

39

 

39

Net realised investment gains/losses – unit-linked and with-profit

210

 

210

Net realised investment gains/losses – insurance-related derivatives

–123

6

–117

Other revenues

 

 

0

Total revenues before non-participating realised gains/losses

7 775

3 822

11 597

 

 

 

 

Expenses

 

 

 

Life and health benefits

–5 216

–2 859

–8 075

Return credited to policyholders

–286

 

–286

Acquisition costs

–1 207

–491

–1 698

Other expenses

–685

–261

–946

Total expenses before interest expenses

–7 394

–3 611

–11 005

 

 

 

 

Operating income

381

211

592

 

 

 

 

Net realised investment gains/losses – non-participating and excluding insurance-related derivatives

 

 

386

Interest expenses

 

 

–544

Income before income tax expenses

 

 

434

 

 

 

 

 

 

 

 

Management expense ratio in %

9.0

6.8

8.3

Operating margin1 in %

5.1

5.5

5.2

d) Net premiums earned and fee income from policyholders by geography

Net premiums earned and fee income from policyholders by regions for the years ended 31 December

Download

USD millions

2012

2013

Americas

9 579

11 468

Europe (including Middle East and Africa)

10 686

11 347

Asia-Pacific

5 181

6 003

Total

25 446

28 818

Net premiums earned and fee income from policyholders by country for the years ended 31 December

Download

USD millions

2012

2013

United States

7 493

9 084

United Kingdom

3 316

3 466

Australia

1 705

2 056

China

1 880

2 045

France

2 110

1 624

Canada

1 196

1 379

Germany

1 063

1 296

Ireland

591

832

Japan

714

764

Italy

439

547

Netherlands

448

457

Other

4 491

5 268

Total

25 446

28 818

Net premiums earned and fee income from policyholders are allocated by country based on the underlying contract.