Our building blocks:
In 2011 we announced the reorganisation of our business into the three Business Units. Since then Swiss Re has made good on its goal of becoming a more agile and flexible company. The new structure has also simplified performance assessment and, most importantly, positioned the Group to deliver shareholder value over the long term.
At Swiss Re we aspire to outperform our peers, especially through Reinsurance, the Admin Re Business Unit, and in our balanced and disciplined asset management approach.
We see opportunities for growth in our Corporate Solutions business, in funding longer lives and health, and especially in high growth markets, where we aim to earn 20%–25% of our premiums by 2015.
Group structure and operating model
Swiss Re Group
Reinsurance is Swiss Re’s largest business in income terms and the foundation of our strength, providing about 80% of gross premiums through two segments — Property & Casualty and Life & Health. The unit aims to extend Swiss Re’s industry-leading position with disciplined underwriting, prudent portfolio management and diligent client service.
To learn how Reinsurance helped meet health needs in South Korea see the chapter on Reinsurance in the 2012 Business Report
Corporate Solutions offers innovative, high-quality insurance capacity to mid-sized and multinational corporations across the globe. Offerings range from standard risk transfer covers and multi-line programmes to highly customised solutions. Corporate Solutions serves customers from over 40 offices worldwide.
To learn how Corporate Solutions supports sports and entertainment see the chapter on Corporate Solutions in the 2012 Business Report
Admin Re® provides risk and capital management solutions by which Swiss Re assumes closed books of in-force life and health insurance business, entire lines of business, or the entire capital stock of life insurance companies. Admin Re® solutions help clients to divest non-core blocks of business, thus reducing administrative costs and freeing up capital.
To learn how Admin Re® has transformed its business see the chapter on Admin Re® in the 2012 Business Report
Our 2011–2015 financial targets
Return on equity:
700 basis points above risk-free (average over 5 years)1
(9.6% in 2011)
Earnings per share growth:
10% average annual growth rate over 5 years, adjusted for special dividends2 (in USD, base 2010)
(16% in 2011)
Economic net worth per share growth plus dividends:
10% average annual growth rate over 5 years (in USD, base 2010)
(–2.1% in 2011)
2 EPS CAGR of 10% has been adjusted to 5% for 2013 to account for the distribution of excess capital through a proposed special dividend of approx. USD 1.5 billion. Special dividend assumed to be fully reinvested and thus comparable to excess capital re-deployment via share buyback at a share price of approx. CHF 70.
3 EPS growth rate from 31 December 2011 until 31 December 2012
4 ENW growth rate from 31 December 2011 until 31 December 2012, including dividends per share paid
About these targets
Achieving the 2011–2015 financial targets is our top priority — at both Business Unit and Group level. To date we are well on track, ahead of schedule on our return on equity and earnings per share targets, and just slightly behind on our economic net worth per share target.
In Property & Casualty Reinsurance we aim to take advantage of a firming cycle and draw on our underwriting expertise to drive greater returns. We expect to deploy more capital to this segment as profitable opportunities allow. The Life & Health segment faces a more challenging market environment, and is engaged in improving margins going forward and in seizing opportunities in growth areas such as longevity. Corporate Solutions is managing its costs and investing for growth, notably in the expansion of its global footprint. In 2012 Admin Re sold its US business and is now positioned to focus directly on the UK and continental Europe. At Group level we undertook moderate re-risking over the year, allocating more of the asset portfolio to corporate bonds.
With these measures we aim to move toward higher returns and achieve our 2011–2015 financial targets.