Report from the Compensation Committee

Dear shareholders,

I am pleased to share with you the Compensation Report from the Compensation Committee for the financial year ended 31 December 2015, which has been prepared in accordance with all applicable laws, rules and regulations.

Within this Compensation Report we give an overview of the compensation context and highlights in 2015 and then further detail the compensation policy and principles that underpin our compensation framework. Following this we set out how compensation is effectively governed within Swiss Re including the procedure for determining compensation and the roles and accountabilities of the responsible parties. Finally we detail the compensation decisions taken in 2015 including those for the Group Executive Committee and the Board of Directors.

Swiss Re’s compensation framework is designed to promote long-term sustainable performance for the Group and its shareholders through a mix of fixed and variable compensation components. It comprises core components such as base salary, pensions and other benefits, as well as a combination of variable short- and long-term incentives as outlined later in this Compensation Report.

The Compensation Committee continues to review and monitor the compensation framework of Swiss Re considering business strategy, targets, risk awareness and corporate values. External factors with respect to regulatory requirements and legal developments, the international context and relevant market data are also taken into account.

During the financial year 2015, the following activities and key decisions took place:

As part of the continued focus on the effectiveness and business alignment of existing compensation components, a review of the Leadership Performance Plan was completed considering the strategy going forward and the new financial targets for 2016 and beyond. As a consequence, the risk-free rate of the Restricted Share Unit component of the Leadership Performance Plan for the 2016 award will be set at the 10-year US government bond rate (as opposed to the 5-year US government bond rate used in previous years), in alignment with the external return on equity target.
Key considerations for annual compensation decisions continue to cover a combination of US GAAP and Economic Value Management based business results, qualitative factors and Swiss Re’s pay-for-performance approach. Compensation decisions were made considering Swiss Re’s overall performance in the reported year in which the Group delivered very strong US GAAP and solid economic results. All three Business Units contributed to this outcome. The underwriting performance of Property & Casualty Reinsurance and Corporate Solutions remained strong, reflecting the high quality of those portfolios. Life & Health Reinsurance exceeded its return on equity targets after the management actions of 2014 addressing the pre-2004 US individual life business. Admin Re^® generated significant gross cash for the Group.
The Compensation Committee again conducted a self-assessment of its effectiveness. Regular interactions with the Swiss Financial Market Supervisory Authority FINMA, shareholders and other key stakeholders were maintained.
At the 2015 Annual General Meeting, under the Swiss Ordinance Against Excessive Compensation at Public Corporations (the Ordinance), Swiss Re’s shareholders for the first time voted on and approved the proposed compensation of the members of the Group Executive Committee as well as the compensation of the Board of Directors. Additionally, all the members of the Compensation Committee were re-elected. Separate to this and as in the past, the 2014 Compensation Report received a positive outcome in the consultative vote. I would like to thank all our shareholders for these positive votes.

The Compensation Committee is satisfied that this Compensation Report complies with all applicable laws, rules and regulations and provides a comprehensive view of the compensation framework at Swiss Re and the 2015 compensation decisions.

We remain committed to providing compensation policies and programmes that support our business strategy and align the interests of our employees with those of our shareholders.

Zurich, 16 March 2016

C. Robert Henrikson
Chairman of the Compensation Committee