Capital structure

Capital

As a result of the cancellation of shares repurchased under the share buy-back programme which was completed on 16 February 2018, the fully paid-in share capital of Swiss Re Ltd as of 31 December 2018 amounted to CHF 33 861 946.50. It is divided into 338 619 465 registered shares, each with a par value of CHF 0.10.

The table below provides an overview of the issued, conditional and authorised capital of Swiss Re Ltd as of 31 December 2018 and 31 December 2017, respectively.

More information is provided in the sections “Conditional and authorised capital in particular” below and “Changes in capital” below.

Conditional and authorised capital in particular

Conditional capital

As of 31 December 2018, the conditional capital of Swiss Re Ltd consisted of the following:

Conditional capital for Equity-Linked Financing Instruments

The share capital of the company may be increased up to CHF 5 000 000 by issuing a maximum of 50 000 000 registered shares, payable in full, each with a nominal value of CHF 0.10.

Such shares are issued through the voluntary or mandatory exercise of conversion and/or option rights granted by the company or Group companies in connection with bonds or similar instruments, including loans or other financial instruments (Equity-Linked Financing Instruments).

Existing shareholders’ subscription rights are excluded. The then current holders of the conversion and/or option rights granted in connection with Equity-Linked Financing Instruments shall be entitled to subscribe for the new registered shares. Subject to the Articles of Association, the Board of Directors may decide to restrict or exclude existing shareholders’ advance subscription rights with regard to these Equity-Linked Financing Instruments. Such a decision may be made in order to issue Equity-Linked Financing Instruments on national and/or international capital markets or by way of private placements in connection with (i) mergers, acquisitions (including takeover) of companies, parts of companies, equity stakes (participations) or new investments planned by the company and/or Group companies, financing or re-financing of such mergers, acquisitions or new in-vestments, or (ii) improving the regulatory capital position of the company or Group companies.

If advance subscription rights are excluded, then (i) the Equity-Linked Financing Instruments are to be placed at market conditions, (ii) the exercise period is not to exceed ten (10) years for option rights and thirty (30) years for conversion rights, and (iii) the conversion or exercise price or the calculation methodology for such price of the new registered shares is to be set in line with the market conditions and practice prevailing at the date on which the Equity-Linked Financing Instruments are issued or converted into new registered shares.

The acquisition of registered shares through the exercise of conversion or option rights and any further transfers of registered shares shall be subject to the restrictions specified in the Articles of Association.

Authorised capital

As of 31 December 2018, the authorised capital of Swiss Re Ltd was as presented in the table below.

According to the Articles of Association, the Board of Directors is authorised to increase the share capital of the company at any time up to 21 April 2019 by an amount not exceeding CHF 8 500 000 through the issue of up to 85 000 000 registered shares, payable in full, each with a nominal value of CHF 0.10. Increases by underwriting as well as partial increases are permitted. The Board of Directors determines the date of issue, the issue price, the type of contribution and any possible acquisition of assets, the date of dividend entitlement as well as the expiry or allocation of non-exercised subscription rights.

The subscription rights of existing shareholders may not be excluded with respect to a maximum of CHF 5 000 000 through the issue of up to 50 000 000 registered shares, payable in full, each with a nominal value of CHF 0.10, out of the total amount of authorised capital.

The Board of Directors may exclude or restrict the subscription rights of existing shareholders with respect to a maximum of CHF 3 500 000 through the issue of up to 35 000 000 registered shares, payable in full, each with a nominal value of CHF 0.10, out of the total amount of authorised capital. Such exclusion or restriction relates to the use of shares in connection with (i) mergers, acquisitions (including takeover) of companies, parts of companies or holdings, equity stakes (participations) or new investments planned by the company and/or Group companies, financing or re-financing of such mergers, acquisitions or new investments, the conversion of loans, securities or equity securities, and/or (ii) improving the regulatory capital position of the company or Group companies in a fast and expeditious manner if the Board of Directors deems it appropriate or prudent to do so (including by way of private placements).

The subscription and acquisition of the new registered shares, as well as each subsequent transfer of registered shares, shall be subject to the restrictions specified in the Articles of Association.

Joint provision for conditional capital for Equity-Linked Financing Instruments and for the above-mentioned authorised capital

The total of registered shares issued from (i) authorised capital, where the existing shareholders’ subscription rights were excluded and (ii) shares issued from conditional capital, where the existing shareholders’ advance subscription rights on the Equity-Linked Financing Instruments were excluded, may not exceed 70 000 000 registered shares up to 21 April 2019.

Changes in capital

Changes in 2018

The Annual General Meeting 2018 approved the reduction of the ordinary share capital by CHF 1 083 281.60 from CHF 34 945 228.10 to CHF 33 861 946.50 by cancelling 10 832 816 shares with a nominal value of CHF 0.10 repurchased by Swiss Re Ltd on a second trading line on SIX Swiss Exchange, via Cantonal Bank of Zurich as agent. The 10 832 816 shares were repurchased under the share buy-back programme lasting from 3 November 2017 until 16 February 2018. The purchase value of the repurchased own shares corresponded to CHF 999 999 975.78.

The reduction of the ordinary share capital could only take place after the required three notices to creditors had been published in the Swiss Gazette of Commerce (Schweizerisches Handelsamtsblatt) as stipulated in Article 733 of the Swiss Code of Obligations. The reduction of the ordinary share capital approved by the Annual General Meeting on 20 April 2018 was published in the Swiss Gazette of Commerce on 24 July 2018.

On 20 April 2018 the Annual General Meeting authorised the Board of Directors to repurchase up to a maximum of CHF 1 billion purchase value of Swiss Re Ltd’s own shares prior to the Annual General Meeting 2019 by way of a buy-back programme for cancellation purposes. The programme was launched on 7 May 2018 and completed on 15 February 2019. The purchase value of the repurchased own shares corresponded to CHF 999 999 983.08.

For further details on the share buy-back programmes, please visit: www.swissre.com/investors/shares/share_buyback/

Changes in 2017

The Annual General Meeting 2017 approved the reduction of the ordinary share capital by CHF 1 062 028.00 from CHF 36 007 256.10 to CHF 34 945 228.10 by cancelling 10 620 280 shares with a nominal value of CHF 0.10 repurchased by Swiss Re Ltd on a second trading line on SIX Swiss Exchange, via Cantonal Bank of Zurich as agent. The 10 620 280 shares were repurchased under the share buy-back programme lasting from 4 November 2016 until 9 February 2017. The purchase value of the repurchased own shares corresponded to CHF 999 999 942.06.

The reduction of the ordinary share capital could only take place after the required three notices to creditors had been published in the Swiss Gazette of Commerce as stipulated in Article 733 of the Swiss Code of Obligations. The reduction of the ordinary share capital approved by the Annual General Meeting on 21 April 2017 was published in the Swiss Gazette of Commerce on 25 July 2017.

On 21 April 2017 the Annual General Meeting authorised the Board of Directors to repurchase up to a maximum of CHF 1 billion purchase value of Swiss Re Ltd’s own shares prior to the Annual General Meeting 2018 by way of a buy-back programme for cancellation purposes. The programme was launched on 3 November 2017 and completed on 16 February 2018. The purchase value of the repurchased own shares corresponded to CHF 999 999 975.78.

For further details on the share buy-back programmes, please visit: www.swissre.com/investors/shares/share_buyback/

The Annual General Meeting 2017 approved that the authority to issue registered shares from authorised capital as set forth in the Articles of Association be renewed to 21 April 2019. It approved that the limitation included in the provisions of the Articles of Association to issue registered shares from authorised capital where the existing shareholders’ subscription rights are excluded and to issue registered shares from conditional capital where the existing shareholders’ advance subscription rights on the Equity-Linked Financing Instruments are excluded be extended to 21 April 2019. The Annual General Meeting 2017 approved that the maximum number of registered shares that may be issued according to the above limitation be set at 70 000 000 from previously 74 000 000.

Changes in previous years

Information about changes in share capital of Swiss Re Ltd as well as of our former parent company Swiss Reinsurance Company Ltd for earlier years is provided in the Annual Reports of these companies for the respective years. For details please visit: www.swissre.com/investors/financial_information/

Shares

All shares issued by Swiss Re Ltd are fully paid-in registered shares, each with a par value of CHF 0.10. Each share carries one vote. There are no categories of shares with a higher or limited voting power, privileged dividend entitlement or any other preferential rights, nor are there any other securities representing a part of the company’s share capital.

The company cannot exercise the voting rights of treasury shares. As of 31 December 2018, shareholders had registered 175 680 523 shares for the purpose of exercising their voting rights, out of a total of 338 619 465 shares issued. As of 31 December 2018, 300 044 141 shares were entitled to dividend payment.

Profit-sharing and participation certificates

Swiss Re Ltd has not issued any profit-sharing and participation certificates.

Limitations on transferability and nominee registrations

Free transferability

The company maintains a share register for the registered shares, in which owners and usufructuaries are entered.

The company may issue its registered shares in the form of single certificates, global certificates and intermediated securities. The company may convert its registered shares from one form into another at any time and without the approval of the shareholders. The shareholders have no right to demand a conversion into a specific form of registered shares.

Each shareholder may, however, at any time request a written confirmation from the company of the registered shares held by such shareholder, as reflected in the company’s share register.

The registered shares are administered as intermediated securities. The transfer of intermediated securities and furnishing of collateral in intermediated securities must conform to the Intermediary-Held Securities Act. The transfer and furnishing of collateral by assignment is excluded.

Persons acquiring registered shares will, upon application, be entered in the share register without limitation as shareholders with voting power if evidence of the acquisition of the shares is provided and if they expressly declare that they have acquired the shares in their own name and for their own account and, where applicable, that they are compliant with the disclosure requirement stipulated by the Financial Markets Infrastructure Act (FMIA) of 19 June 2015. The Board of Directors is allowed to remove the entry of a shareholder with voting rights from the share register retroactively from the date of entry if the entry was obtained under false pretences or if the owner, whether acting alone or as part of a group, has breached notification rules.

Admissibility of nominee registrations

Persons not expressly declaring in their application for entry in the share register that they are holding shares for their own account (nominees) are entered without further inquiry in the share register of Swiss Re Ltd as shareholders with voting rights up to a maximum of 2% of the outstanding share capital available at the time. Additional shares held by such nominees that exceed the limit of 2% of the outstanding share capital are entered in the share register with voting rights only if such nominees disclose the names, addresses and shareholdings of any persons for whose account the nominee is holding 0.5% or more of the outstanding share capital. In addition, such nominees must comply with the disclosure requirements of the FMIA.

Convertible bonds and options

Convertible bonds

As of 31 December 2018, except as provided below, neither Swiss Re Ltd nor any of its subsidiaries has any bonds outstanding that are convertible into equity securities of Swiss Re Ltd solely at the option of bondholders. The same applied as of 31 December 2017 and 31 December 2016.

On 6 June 2018, Swiss Re Ltd placed with the market via a repackaging vehicle USD 500 000 000 of six-year exchange-able notes, which may be stock-settled at the option of Swiss Re Ltd. Subject to the conditions of the notes, noteholders may exchange their notes for ordinary shares of Swiss Re Ltd at an initial exchange price of USD 115.2593 (set at a premium of 30% to the reference share price of USD 88.6610 (being the initial volume weighted average price of such shares between 7 June and 20 June 2018)). The exchange price is subject to adjustment in certain circumstances described in the conditions of the notes. To economically offset the settlement of a noteholder-initiated exchange, Swiss Re Ltd purchased matching call options on Swiss Re Ltd shares with a portion of the proceeds. Consequently, no new Swiss Re Ltd shares will be issued upon a noteholder-initiated exchange. The settlement and delivery of these notes took place on 13 June 2018. For further details please see Note 7.

Options

Valid exercise of stock options granted to Swiss Re employees are either cash or physically settled (with treasury shares). The number of issued shares will not be affected. For details on stock options granted to Swiss Re employees, see Note 15 to the Group financial statements of this Financial Report.