2023 was a significant year for our Life & Health Reinsurance (L&H Re) as we created a standalone Business Unit. In this new setup we have put clients at the centre of what we do, empowering our team to achieve a sharper focus and increased simplicity.

L&H Re delivered on its financial commitment in 2023, with an on-target US GAAP net income of USD 976 million. The result benefitted from a solid core book of business, supported by large transactions and the higher yield environment that allowed us to generate a strong investment income.

L&H Re remains integral to Swiss Re's vision of making the world more resilient. Mortality, income protection and health covers support people during difficult times in their lives – when a loved one passes away, when they suffer from a critical illness or when they are trying to return to work after an injury. Together with our clients, we provide vital financial resilience to millions of people around the world.

In 2023, L&H Re remained the leading mortality reinsurer, with over 15% market share globally [1]. We reinsured well over 220 million life insurance policies covering in excess of 270 million family members.

Forward with purpose

Swiss Re's journey into life reinsurance began with its first Swiss treaty in 1865. Today, our value proposition is to create forward momentum, allowing our clients and their customers to move forward in Life with confidence, no matter how complex the market. We delivered on our commitment to our investors while creating value for our clients and making L&H Re a great place to work.

An important part of our internal transformation in 2023 was in the new market unit structure. This has brought our decision-making closer to our clients, reducing turnaround time and increasing effectiveness. The new structure also supports our ability to go beyond our risk transfer business. And this year, we closed our first fee-only deal and ramped up our expertise in large, innovative tailored transactions.

Building resilience through a strong franchise

L&H Re has a strong client franchise and remains top ranked in its target markets according to NMG Consulting's Global L&H Re Study. The L&H Re team has over 1 600 people in 29 offices across the globe. In a business where contracts often span multiple decades, close contact with our clients allows us to provide long-term value across the entire policy life cycle.

In recent years, we have been there for our clients when they needed us the most. L&H Re absorbed USD 3.5 billion in COVID-related mortality claims between 2020 and 2022. As COVID-19 has now moved into an endemic phase, our clients have taken measures to strengthen their businesses and protect them from shock risks – especially through tailored transactions.

In 2023, our teams tailored risk transfer structures for a wide range of risks, including interest rate volatility in clients' investment portfolios and mass lapse events. These highly specialised transactions are ideal for L&H Re and the talented specialists capable of closing large complex transactions.

Supporting our clients across the entire value chain

Alongside the traditional risk transfer business, L&H Re is active in improving life insurance along the entire value chain.

At the distribution end of the chain, much of our work focuses on understanding the risks our clients are underwriting. L&H Re's Life Guide remains the leading underwriting manual globally, according to the Global L&H Re Study by NMG Consulting. It brings scientific, evidence-backed methods of risk assessment to our clients and is now used by 781 clients in 112 countries. In a typical month, Life Guide’s platform registers a staggering 1.6 million client interactions.

Product development is also important to our clients. In 2023, we were especially proud of our work in health lines. For example, we were part of a consortium to rapidly create a prototype insurance that enables access to screening, vaccinations and treatment for female cancer patients in Kenya, work which is now moving to Asia. In advanced life insurance markets, we have expanded underwriting programmes for HIV life insurance applicants through our Life Guide HIV+ philosophy.

This work is incredibly rewarding – for the thousands of people who now have access to medical and financial services, and also for the L&H Re team who can apply their knowledge to create complex medical underwriting tools.

To further enhance the experience of filing life insurance claims, we have focused on deploying our technology to make the claims process as lean as possible. Automated claims tools, such as Automated Customer Experience (ACE) and Claims Automated Rules Engine (CARE), have taken much of the complexity out of filing a life insurance claim, thereby improving the experience for claimants.

Outlook

After a successful 2023, we are entering 2024 with a very positive outlook. L&H Re has a powerful and diversified franchise with strong new business generation across the world. With global primary life insurance premiums predicted to grow by 1.6% in 2024, we see opportunities for further organic growth in all regions. This growth will not only benefit our business – it will help close protection gaps.

We will continue to focus on balancing and steering the L&H portfolio. We remain committed to our largest mortality book in the US and see opportunities for growth in Asia. There are also opportunities for closing health protection gaps, and we expect the health business globally to increase its share of our portfolio. For the longevity business, we will grow selectively where business can be written at risk-adequate rates.

2024 will see an important change in our financial reporting. With the implementation of IFRS from the first quarter of 2024, we will be able to recognise the full value of our long-term contracts.

Factoring in the uplift from the IFRS accounting change, our ongoing ability to generate new business opportunities and our discipline to keep costs flat, we commit to an ambitious IFRS net income target of approximately USD 1.5 billion in 2024.

[1] Source: Swiss Re Institute, gross premiums written full-year estimate for 2023.