Optimized printing

Annual Report 2018

EVM financial information

EVM income statement

For the years ended 31 December

Download

USD millions, unless otherwise stated

2017

2018

 

 

 

Underwriting result

 

 

Gross premiums and fees

41 846

44 807

Gross premiums and fees growth rate, %

–11.4

7.1

Premiums and fees

40 796

43 860

Premiums and fees retention rate, %

97.5

97.9

Premiums and fees growth rate, %

–12.4

7.5

Claims and benefits

–30 017

–29 904

Commissions

–7 413

–8 278

Other

136

286

Gross underwriting result – new business

3 502

5 965

Expenses

–3 390

–3 624

Net underwriting result – new business

112

2 341

Taxes

18

–415

Capital costs

–1 475

–1 570

EVM profit – new business

–1 345

356

EVM profit – previous years’ business

–148

638

EVM profit – underwriting

–1 493

993

Investment result

 

 

Mark-to-market investment result

5 132

895

Benchmark investment result

–1 761

–1 702

Gross outperformance (underperformance)

3 371

–808

Other

125

116

Expenses

–253

–252

Net outperformance (underperformance)

3 243

–943

Taxes

–747

167

Capital costs

–1 012

–911

EVM profit – investments

1 484

–1 686

EVM profit

–9

–693

Cost of debt

–626

–67

Release of current year capital costs

2 792

3 059

Additional taxes

–290

–133

Total contribution to ENW

1 867

2 166

 

 

 

Profit margin – new business, %

–4.1

1.2

Profit margin – previous years’ business, %

–0.8

3.5

Profit margin – investments, %

16.5

–18.3

EVM Balance sheet

As of 31 December

Download

USD millions

2017

2018

Assets

 

 

Investments

162 873

143 663

Cash and cash equivalents

6 467

5 695

In-force business assets

224 231

223 075

Retrocession assets

25 000

22 170

Other assets

3 998

3 540

Total assets

422 569

398 142

 

 

 

Liabilities

 

 

In-force business liabilities

331 288

315 737

Retrocession liabilities

19 835

17 114

Provision for capital costs

9 034

7 569

Future income tax liabilities

4 914

4 264

Debt

13 095

11 180

Other liabilities

6 736

6 285

Total liabilities

384 902

362 149

Economic net worth

37 667

35 993

Total liabilities and economic net worth

422 569

398 142

Statement of economic net worth

For the years ended 31 December

Download

USD millions

2017

2018

 

 

 

Economic net worth as of 1 January

36 648

37 667

Total contribution to ENW

1 867

2 166

Dividends and share buy-back

–2 629

–2 939

Other, including foreign exchange on economic net worth

1 781

–901

Economic net worth as of 31 December

37 667

35 993

Common shares outstanding as of 31 December

314 585 765

300 044 141

Economic net worth per share in USD as of 31 December

119.74

119.96

Business Segments – EVM Income Statement

For the year ended 31 December

Download

USD millions, unless otherwise stated

Property & Casualty Reinsurance

Life & Health Reinsurance

Corporate Solutions

Life Capital

Group items

Consoli­dation

Total

1

The Group revised its disclosure of gross premiums and fees to include assumed intra-group transactions. Comparative information for 2017 has been amended accordingly; this includes the gross premiums and fees growth rate and premiums and fees retention rate.

2

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

 

 

 

 

 

 

 

 

2017

 

 

 

 

 

 

 

Underwriting result

 

 

 

 

 

 

 

Gross premiums and fees1

17 914

19 118

4 207

1 315

 

–708

41 846

Gross premiums and fees growth rate, %1

–4.8

–20.7

0.0

49.6

 

 

–11.4

Premiums and fees

17 495

18 974

3 685

642

 

 

40 796

Premiums and fees retention rate, %1

97.7

99.2

87.6

48.8

 

 

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

0

3 502

Expenses

–1 320

–909

–843

–203

–115

 

–3 390

Net underwriting result – new business

–1 281

2 070

–740

175

–112

0

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

0

–1 345

EVM profit – previous years’ business

120

11

–257

20

–42

0

–148

EVM profit – underwriting

–1 373

998

–996

152

–274

0

–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

0

3 371

Other

58

26

9

32

 

 

125

Expenses

–87

–63

–14

–38

–51

 

–253

Net outperformance (underperformance)

716

1 118

152

798

459

0

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

0

1 484

EVM profit

–1 161

1 625

–917

572

–128

0

–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

0

1 867

 

 

 

 

 

 

 

 

Profit margin – new business, %

–10.2

8.6

–21.2

4.3

 

 

–4.1

Profit margin – previous years’ business, %2

1.9

0.1

–18.3

1.0

 

 

–0.8

Profit margin – investments, %

7.2

16.0

14.6

 

11.0

 

16.5

Download

USD millions, unless otherwise stated

Property & Casualty Reinsurance

Life & Health Reinsurance

Corporate Solutions

Life Capital

Group items

Consoli­dation

Total

1

The overall previous years’ business profit margin for the Business Unit Reinsurance was 5.7%.

 

 

 

 

 

 

 

 

2018

 

 

 

 

 

 

 

Underwriting result

 

 

 

 

 

 

 

Gross premiums and fees

19 014

19 754

4 488

1 376

 

175

44 807

Gross premiums and fees growth rate, %

6.1

3.3

6.7

4.7

 

 

7.1

Premiums and fees

18 604

20 253

3 962

1 042

 

 

43 860

Premiums and fees retention rate, %

97.8

102.5

88.3

75.7

 

 

97.9

Premiums and fees growth rate, %

6.3

6.7

7.5

62.3

 

 

7.5

Claims and benefits

–12 587

–14 141

–2 367

–809

 

 

–29 904

Commissions

–4 644

–2 923

–617

–93

 

 

–8 278

Other

62

–143

–9

286

89

 

286

Gross underwriting result – new business

1 435

3 045

969

427

89

0

5 965

Expenses

–1 301

–929

–880

–302

–211

 

–3 624

Net underwriting result – new business

134

2 116

89

124

–122

0

2 341

Taxes

–117

–388

–21

31

79

 

–415

Capital costs

–447

–748

–148

–89

–137

 

–1 570

EVM profit – new business

–430

980

–81

66

–179

0

356

EVM profit – previous years’ business

698

168

–530

374

–72

0

638

EVM profit – underwriting

268

1 148

–611

440

–251

0

993

Investment result

 

 

 

 

 

 

 

Mark-to-market investment result

1 046

–28

125

–137

–112

 

895

Benchmark investment result

–707

–442

–164

–310

–77

 

–1 702

Gross outperformance (underperformance)

339

–470

–39

–447

–189

0

–808

Other

59

22

10

24

1

 

116

Expenses

–90

–66

–17

–36

–44

 

–252

Net outperformance (underperformance)

308

–513

–46

–460

–232

0

–943

Taxes

–74

97

9

92

44

 

167

Capital costs

–302

–209

–26

–165

–209

 

–911

EVM profit – investments

–68

–625

–63

–533

–398

0

–1 686

EVM profit

199

523

–673

–93

–649

0

–693

Cost of debt

–58

–40

36

–2

–3

 

–67

Release of current year capital costs

908

1 060

200

398

493

 

3 059

Additional taxes

299

–272

–37

–38

–86

 

–133

Total contribution to ENW

1 350

1 271

–474

265

–245

0

2 166

 

 

 

 

 

 

 

 

Profit margin – new business, %

–3.1

8.2

–2.2

11.8

 

 

1.2

Profit margin – previous years’ business, %1

11.7

1.8

–36.4

23.1

 

 

3.5

Profit margin – investments, %

–2.4

–19.4

–11.9

 

–16.5

 

–18.3

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

 

 

 

 

 

 

 

 

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

Download

USD millions

Property & Casualty Reinsurance

Life & Health Reinsurance

Corporate Solutions

Life Capital

Group items

Consoli­dation

Total

 

 

 

 

 

 

 

 

2018

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Investments

55 645

34 641

8 774

49 954

7 263

–12 614

143 663

Cash and cash equivalents

1 651

1 705

795

1 316

227

 

5 695

In-force business assets

15 912

219 518

2 677

28 760

 

–43 793

223 075

Retrocession assets

2 613

33 303

5 046

22 577

 

–41 369

22 170

Other assets

5 710

1 954

745

1 196

1 370

–7 434

3 540

Total assets

81 531

291 122

18 038

103 802

8 860

–105 210

398 142

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

In-force business liabilities

54 480

215 998

13 237

72 558

745

–41 280

315 737

Retrocession liabilities

492

35 317

665

24 529

 

–43 889

17 114

Provision for capital costs

–88

6 250

226

1 181

 

 

7 569

Future income tax liabilities

324

4 396

–186

–48

–221

 

4 264

Debt

5 415

14 339

817

1 290

547

–11 227

11 180

Other liabilities

7 996

2 446

824

1 023

2 810

–8 814

6 285

Total liabilities

68 618

278 745

15 583

100 532

3 881

–105 210

362 149

Economic net worth

12 913

12 377

2 454

3 270

4 979

0

35 993

Total liabilities and economic net worth

81 531

291 122

18 038

103 802

8 860

–105 210

398 142

Business segments – statement of economic net worth

For the year ended 31 December

Download

USD millions

Property & Casualty Reinsurance

Life & Health Reinsurance

Corporate Solutions

Life Capital

Group items

Consoli­dation

Total

1

The Group revised the method to allocate EVM deferred tax assets and liabilities to business segments. The impact of the change in EVM methodology was recorded as an adjustment to the opening balance of 2018 economic net worth.

 

 

 

 

 

 

 

 

2018

 

 

 

 

 

 

 

Economic net worth as of 1 January

12 410

13 081

2 918

3 978

5 285

–5

37 667

Change in EVM methodology1

743

–813

63

64

–57

 

0

Adjusted economic net worth as of 1 January

13 153

12 268

2 981

4 042

5 228

–5

37 667

Total contribution to ENW

1 350

1 271

–474

265

–245

 

2 166

Dividends and share buy-back

–1 300

–650

–50

–1 125

186

 

–2 939

Other, including foreign exchange on economic net worth

–289

–512

–3

88

–190

5

–901

Economic net worth as of 31 December

12 913

12 377

2 454

3 270

4 979

0

35 993

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 book yields.
  • 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, including book yield discounting 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 other 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 to US GAAP

As of 31 December

Download

USD billions

Property & Casualty Reinsurance

Life & Health Reinsurance

Corporate Solutions

Life Capital

Group items

Total

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

2018

 

 

 

 

 

 

US GAAP shareholders’ equity

9.5

6.3

1.8

5.1

5.3

27.9

Discounting

4.8

–0.8

0.4

–3.1

0.0

1.3

Investments and debt

2.0

–1.4

0.0

0.1

0.9

1.6

Reserving basis

 

 

 

 

 

 

GAAP margins

0.0

18.6

0.0

2.8

0.0

21.4

Other

0.0

0.1

0.9

–0.5

–0.7

–0.2

Recognition differences

0.0

–0.2

–0.1

–0.1

0.0

–0.4

Goodwill and other intangibles

–2.0

–1.8

–0.4

–0.2

–0.6

–4.9

Taxes

–1.2

–2.2

–0.1

0.5

0.0

–3.1

Capital costs

0.2

–6.2

–0.2

–1.5

0.0

–7.7

Other

–0.4

0.1

0.0

0.0

0.2

–0.1

Total EVM valuation adjustments

3.4

6.1

0.7

–1.8

–0.3

8.1

Economic net worth

12.9

12.4

2.5

3.3

5.0

36.0