Swiss Re(SSREY) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The group net income for the first nine months of 2024 stands at $2.2 billion, with a third-quarter profit of$102 million, despite significant reserving actions [13][8] - The P&C Re's nine-month combined ratio is 92.8%, reflecting resilient underwriting results, including a net negative impact of $2.8 billion from reserve strengthening [14][8] - The return on investments for the first nine months is strong at 3.9$400 million year-over-year [21][8] Business Line Data and Key Metrics Changes - Life & Health Re reported net income of $1.2 billion for the first nine months, driven by enforced margins and recurring investment income, with a target of approximately$1.5 billion for the full year [17][19] - Corporate Solutions achieved a nine-month combined ratio of 89.4%, reflecting strong underlying business performance, and is on track to exceed the full-year target of less than 93% [20][8] - P&C Re's large Nat Cat claims for the first nine months were a little over $800 million, compared to a budget of about$1.35 billion [14][15] Market Data and Key Metrics Changes - The company has pruned its book by 21% at this year's renewals due to cautiousness regarding new business in the US liability market [5][8] - The company expects robust demand for reinsurance driven by significant catastrophe activity, which will remind primary companies of the need to buy reinsurance [29][8] Company Strategy and Development Direction - The company aims to position itself at the higher end of the best estimate range for P&C reserves, specifically at the 90th percentile, to enhance overall resilience [6][8] - The decision to withdraw from iptiQ and sell iptiQ EMEA P&C to Allianz Direct is part of the strategy to maximize value for the group [9][8] - The company plans to announce financial targets for 2025 during the Management Dialogue event on December 13 [10][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a group net income exceeding $3 billion for 2024, assuming normal loss activity for the remainder of the year [24][8] - The management remains vigilant and proactive regarding new business, particularly in light of the adverse developments in US liability costs [7][8] - The management acknowledged the need for rate increases in the US liability lines to accommodate ultimate losses and find equilibrium in the market [96][8] Other Important Information - The company has significantly strengthened its US liability reserves, adding$2.4 billion in Q3, bringing total prior year US liability reserve additions to $3.1 billion for the first nine months [3][8] - The capital position remains strong with a group SST ratio of 284$2.4 billion reserve addition in Q3 was for incurred but not reported (IBNR) claims, reflecting a more prudent position [37][8] Question: What is the current SST ratio? - Management did not provide a quarterly update but indicated that the reserve impacts would not materially affect the SST ratio due to strong performance in other areas [41][8] Question: Are you comfortable with the state of the Life & Health reserves? - Management expressed confidence in the Life & Health reserves, noting adjustments made in previous years and a strong position overall [77][8] Question: What is the expected impact of the Trump presidency on the business? - Management indicated that primary insurance is state-regulated, and any potential impact would likely be related to macroeconomic conditions rather than direct regulatory changes [92][8]