Optimized printing

Annual Report 2017

EVM financial information

EVM income statement

For the years ended 31 December

Download

USD millions, unless otherwise stated

2016

2017

 

 

 

Underwriting result

 

 

Gross premiums and fees

47 235

41 846

Gross premiums and fees growth rate, %

15.3

–11.4

Premiums and fees

46 566

40 796

Premiums and fees retention rate, %

98.6

97.5

Premiums and fees growth rate, %

14.8

–12.4

Claims and benefits

–31 668

–30 017

Commissions

–8 492

–7 413

Other

–240

136

Gross underwriting result – new business

6 166

3 502

Expenses

–3 314

–3 390

Net underwriting result – new business

2 852

112

Taxes

–744

18

Capital costs

–1 224

–1 475

EVM profit – new business

884

–1 345

EVM profit – previous years’ business

–579

–148

EVM profit – underwriting

305

–1 493

Investment result

 

 

Mark-to-market investment result

7 500

5 132

Benchmark investment result

–4 266

–1 761

Gross outperformance (underperformance)

3 234

3 371

Other

121

125

Expenses

–274

–253

Net outperformance (underperformance)

3 081

3 243

Taxes

–743

–747

Capital costs

–1 244

–1 012

EVM profit – investments

1 094

1 484

EVM profit

1 399

–9

Cost of debt

–461

–626

Release of current year capital costs

2 778

2 792

Additional taxes

515

–290

Total contribution to ENW

4 231

1 867

 

 

 

Profit margin – new business, %

3.1

–4.1

Profit margin – previous years’ business, %

–2.9

–0.8

Profit margin – investments, %

12.0

16.5

EVM balance sheet

As of 31 December

Download

USD millions

2016

2017

Assets

 

 

Investments

164 314

162 873

Cash and cash equivalents

9 007

6 467

In-force business assets

197 647

224 231

Retrocession assets

24 457

25 000

Other assets

3 017

3 998

Total assets

398 442

422 569

 

 

 

Liabilities

 

 

In-force business liabilities

304 359

331 288

Retrocession liabilities

19 663

19 835

Provision for capital costs

9 260

9 034

Future income tax liabilities

4 606

4 914

Debt

14 199

13 095

Other liabilities

9 707

6 736

Total liabilities

361 794

384 902

Economic net worth

36 648

37 667

Total liabilities and economic net worth

398 442

422 569

Statement of economic net worth

For the years ended 31 December

Download

USD millions

2016

2017

 

 

 

Economic net worth as of 1 January

37 358

36 648

Change in EVM methodology

–1 699

 

Adjusted economic net worth as of 1 January

35 659

36 648

Total contribution to ENW

4 231

1 867

Dividends and share buy-back

–2 662

–2 629

Other, including foreign exchange on economic net worth

–580

1 781

Economic net worth as of 31 December

36 648

37 667

Common shares outstanding as of 31 December

325 978 727

314 585 765

Economic net worth per share in USD as of 31 December

112.42

119.74

Business segments – EVM income statement

For the years ended 31 December

Download

USD millions, unless otherwise stated

Property & Casualty Reinsur­ance

Life & Health Reinsur­ance

Corporate Solutions

Life Capital

Group items

Total

1

The overall previous years’ business profit margin for the Business Unit Reinsurance was –1.1%.

 

 

 

 

 

 

 

2016

 

 

 

 

 

 

Underwriting result

 

 

 

 

 

 

Gross premiums and fees

18 493

23 796

4 067

879

 

47 235

Gross premiums and fees growth rate, %

–1.7

34.7

8.7

17.2

 

15.3

Premiums and fees

18 440

24 060

3 708

358

 

46 566

Premiums and fees retention rate, %

99.7

101.1

91.2

40.7

 

98.6

Premiums and fees growth rate, %

–1.4

33.9

4.5

0.6

 

14.8

Claims and benefits

–11 539

–17 748

–2 092

–289

 

–31 668

Commissions

–4 308

–3 609

–570

–5

 

–8 492

Other

–34

–57

–137

–5

–7

–240

Gross underwriting result – new business

2 559

2 646

909

59

–7

6 166

Expenses

–1 335

–862

–842

–188

–87

–3 314

Net underwriting result – new business

1 224

1 784

67

–129

–94

2 852

Taxes

–346

–408

–68

15

63

–744

Capital costs

–598

–281

–143

–49

–153

–1 224

EVM profit – new business

280

1 095

–144

–163

–184

884

EVM profit – previous years’ business

311

–494

–26

–406

36

–579

EVM profit – underwriting

591

601

–170

–569

–148

305

Investment result

 

 

 

 

 

 

Mark-to-market investment result

1 626

2 317

261

3 211

85

7 500

Benchmark investment result

–1 073

–1 086

–100

–1 960

–47

–4 266

Gross outperformance (underperformance)

553

1 231

161

1 251

38

3 234

Other

53

23

8

37

 

121

Expenses

–88

–69

–19

–52

–46

–274

Net outperformance (underperformance)

518

1 185

150

1 236

–8

3 081

Taxes

–124

–289

–36

–296

2

–743

Capital costs

–423

–300

–55

–256

–210

–1 244

EVM profit – investments

–29

596

59

684

–216

1 094

EVM profit

562

1 197

–111

115

–364

1 399

Cost of debt

–212

–154

–14

–63

–18

–461

Release of current year capital costs

1 008

757

202

426

385

2 778

Additional taxes

231

116

63

121

–16

515

Total contribution to ENW

1 589

1 916

140

599

–13

4 231

 

 

 

 

 

 

 

Profit margin – new business, %

1.9

11.0

–4.2

 

3.1

Profit margin – previous years’ business, %1

5.1

–4.7

–2.1

–17.8

 

–2.9

Profit margin – investments, %

–1.0

14.7

10.9

 

–15.7

12.0

Download

USD millions, unless otherwise stated

Property & Casualty Reinsur­ance

Life & Health Reinsur­ance

Corporate Solutions

Life Capital

Group items

Total

1

The overall previous years’ business profit margin for the Business Unit Reinsurance was 0.8%.

 

 

 

 

 

 

 

2017

 

 

 

 

 

 

Underwriting result

 

 

 

 

 

 

Gross premiums and fees

17 668

18 923

4 088

1 167

 

41 846

Gross premiums and fees growth rate, %

–4.5

–20.5

0.5

32.8

 

–11.4

Premiums and fees

17 495

18 974

3 685

642

 

40 796

Premiums and fees retention rate, %

99.0

100.3

90.1

55.0

 

97.5

Premiums and fees growth rate, %

–5.1

–21.1

–0.6

79.3

 

–12.4

Claims and benefits

–13 253

–13 330

–2 929

–505

 

–30 017

Commissions

–4 156

–2 628

–561

–68

 

–7 413

Other

–47

–37

–92

309

3

136

Gross underwriting result – new business

39

2 979

103

378

3

3 502

Expenses

–1 320

–909

–843

–203

–115

–3 390

Net underwriting result – new business

–1 281

2 070

–740

175

–112

112

Taxes

172

–369

129

22

64

18

Capital costs

–384

–714

–128

–65

–184

–1 475

EVM profit – new business

–1 493

987

–739

132

–232

–1 345

EVM profit – previous years’ business

120

11

–257

20

–42

–148

EVM profit – underwriting

–1 373

998

–996

152

–274

–1 493

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

Gross outperformance (underperformance)

745

1 155

157

804

510

3 371

Other

58

26

9

32

 

125

Expenses

–87

–63

–14

–38

–51

–253

Net outperformance (underperformance)

716

1 118

152

798

459

3 243

Taxes

–162

–260

–35

–184

–106

–747

Capital costs

–342

–231

–38

–194

–207

–1 012

EVM profit – investments

212

627

79

420

146

1 484

EVM profit

–1 161

1 625

–917

572

–128

–9

Cost of debt

–352

–170

–39

–40

–25

–626

Release of current year capital costs

881

871

186

382

472

2 792

Additional taxes

–322

–146

20

73

85

–290

Total contribution to ENW

–954

2 180

–750

987

404

1 867

 

 

 

 

 

 

 

Profit margin – new business, %

–10.2

8.6

–21.2

4.3

 

–4.1

Profit margin – previous years’ business, %1

1.9

0.1

–18.3

1.0

 

–0.8

Profit margin – investments, %

7.2

16.0

14.6

 

11.0

16.5

Business segments – EVM balance sheet

As of 31 December

Download

USD millions

Property & Casualty Reinsur­ance

Life & Health Reinsur­ance

Corporate Solutions

Life Capital

Group items

Consoli­dation

Total

 

 

 

 

 

 

 

 

2016

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Investments

51 155

37 082

8 252

68 155

6 420

–6 750

164 314

Cash and cash equivalents

4 922

410

469

2 636

570

 

9 007

In-force business assets

14 725

177 930

2 891

10 003

 

–7 902

197 647

Retrocession assets

2 640

18 541

4 697

9 021

 

–10 442

24 457

Other assets

5 631

1 258

401

438

955

–5 666

3 017

Total assets

79 073

235 221

16 710

90 253

7 945

–30 760

398 442

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

In-force business liabilities

48 803

180 098

11 170

74 072

658

–10 442

304 359

Retrocession liabilities

472

18 520

983

7 590

 

–7 902

19 663

Provision for capital costs

212

7 033

214

1 801

 

 

9 260

Future income tax liabilities

1 541

2 574

317

251

–77

 

4 606

Debt

5 111

12 536

497

1 590

513

–6 048

14 199

Other liabilities

8 655

3 708

721

1 148

1 841

–6 366

9 707

Total liabilities

64 794

224 469

13 902

86 452

2 935

–30 758

361 794

Economic net worth

14 279

10 752

2 808

3 801

5 010

–2

36 648

Total liabilities and economic net worth

79 073

235 221

16 710

90 253

7 945

–30 760

398 442

Download

USD millions

Property & Casualty Reinsur­ance

Life & Health Reinsur­ance

Corporate Solutions

Life Capital

Group items

Consol­idation

Total

 

 

 

 

 

 

 

 

2017

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Investments

54 625

38 384

9 323

64 776

6 284

–10 519

162 873

Cash and cash equivalents

1 335

1 595

651

2 623

263

 

6 467

In-force business assets

16 446

223 346

2 962

32 100

3

–50 626

224 231

Retrocession assets

2 776

35 944

4 637

25 378

 

–43 735

25 000

Other assets

6 675

652

485

1 657

1 651

–7 122

3 998

Total assets

81 857

299 921

18 058

126 534

8 201

–112 002

422 569

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

In-force business liabilities

54 174

218 935

12 608

88 590

717

–43 736

331 288

Retrocession liabilities

537

40 151

912

28 861

 

–50 626

19 835

Provision for capital costs

97

7 179

198

1 560

 

 

9 034

Future income tax liabilities

1 513

3 259

79

239

–176

 

4 914

Debt

4 697

14 071

526

2 246

60

–8 505

13 095

Other liabilities

8 429

3 245

817

1 060

2 315

–9 130

6 736

Total liabilities

69 447

286 840

15 140

122 556

2 916

–111 997

384 902

Economic net worth

12 410

13 081

2 918

3 978

5 285

–5

37 667

Total liabilities and economic net worth

81 857

299 921

18 058

126 534

8 201

–112 002

422 569

Business segments – Statement of economic net worth

For the years ended 31 December

Download

USD millions

Property & Casualty Reinsur­ance

Life & Health Reinsur­ance

Corporate Solutions

Life Capital

Group items

Consol­idation

Total

 

 

 

 

 

 

 

 

2017

 

 

 

 

 

 

 

Economic net worth as of 1 January

14 279

10 752

2 808

3 801

5 010

–2

36 648

Total contribution to ENW

–954

2 180

–750

987

404

 

1 867

Dividends and share buy-back

–1 950

–650

–150

–1 058

1 179

 

–2 629

Other, including foreign exchange on economic net worth

1 035

799

1 010

248

–1 308

–3

1 781

Economic net worth as of 31 December

12 410

13 081

2 918

3 978

5 285

–5

37 667

Comparison of EVM and US GAAP

The most significant differences between EVM and US GAAP are as follows:

  • Discounting: For EVM, all future expected cash flows are discounted using risk-free interest rates. Under US GAAP, most property and casualty reserves are undiscounted (except for reserves acquired in business combinations), whereas life and health reserves are usually discounted based on locked-in interest rate assumptions.
  • Investments and debt: For EVM, all investments and debt positions are carried at fair value. Under US GAAP, different treatment applies for certain investments (eg real estate is held at depreciated cost) and debt is carried at amortised cost rather than at fair value.
  • Reserving basis: For EVM, best estimate current assumptions are used for all re/insurance reserves. Under US GAAP, life and health assumptions are usually locked-in and can include a provision for adverse deviation.
  • Recognition differences: EVM considers the economic value related to annual management charges on unit-linked funds and adjusts for counterparty credit risk in the valuation of insurance related net assets. In addition, EVM does not show minority interests on the balance sheet, but consolidates assets and liabilities based on the proportion of the interest held by Swiss Re.
  • Goodwill and other intangibles: EVM excludes the recognition of potential future new business activities, including potential renewals. As a result, no goodwill or intangible assets are carried in the EVM balance sheet.
  • Taxes: For EVM, deferred tax assets and liabilities are recognised for temporary differences between US GAAP and EVM.
  • Capital costs: EVM recognises opportunity costs for shareholders’ capital. The present value of capital costs allocated to existing contracts are recognised in the EVM balance sheet.

Business segments – Reconciliation US GAAP

As of 31 December

Download

USD billions

Property & Casualty Reinsur­ance

Life & Health Reinsur­ance

Corporate Solutions

Life Capital

Group items

Total

 

 

 

 

 

 

 

2016

 

 

 

 

 

 

US GAAP shareholders’ equity

13.0

7.6

2.2

7.3

5.5

35.6

Discounting

4.1

–0.4

0.2

–3.8

0.0

0.1

Investments and debt

1.3

–2.1

0.0

0.0

0.4

–0.4

Reserving basis

 

 

 

 

 

 

GAAP margins

0.0

15.2

0.0

2.8

0.0

18.0

Other

–0.3

–0.2

1.0

–0.6

–0.6

–0.7

Recognition differences

–0.1

0.1

0.0

–0.7

0.0

–0.7

Goodwill and other intangibles

–2.0

–1.8

–0.3

–0.1

–0.5

–4.7

Taxes

–1.5

–0.5

–0.3

0.6

0.1

–1.6

Capital costs

0.2

–7.1

–0.1

–1.7

–0.1

–8.8

Other

–0.5

0.0

0.1

0.0

0.2

–0.2

Total EVM valuation adjustments

1.2

3.2

0.6

–3.5

–0.5

1.0

Economic net worth

14.2

10.8

2.8

3.8

5.0

36.6

 

 

 

 

 

 

 

2017

 

 

 

 

 

 

US GAAP shareholders’ equity

10.7

8.2

2.4

7.1

5.7

34.1

Discounting

4.4

–0.3

0.4

–4.2

0.0

0.3

Investments and debt

1.8

–2.3

0.0

0.0

0.5

0.0

Reserving basis

 

 

 

 

 

 

GAAP margins

0.0

17.3

0.0

3.3

0.0

20.6

Other

–0.1

0.1

1.0

–0.5

–0.7

–0.2

Recognition differences

0.0

0.0

–0.1

–0.5

0.0

–0.6

Goodwill and other intangibles

–2.0

–1.9

–0.4

–0.2

–0.5

–5.0

Taxes

–2.0

–0.9

–0.3

0.6

0.1

–2.5

Capital costs

0.0

–7.1

–0.2

–1.6

0.0

–8.9

Other

–0.4

0.0

0.1

0.0

0.2

–0.1

Total EVM valuation adjustments

1.7

4.9

0.5

–3.1

–0.4

3.6

Economic net worth

12.4

13.1

2.9

4.0

5.3

37.7