Annual Report 2020 Business Report

Transforming Tomorrow Together Transforming Tomorrow How can we use Together digital solutions to make more accessible?

Anette Bronder Group Chief Operating Officer

How can we build resilience in the wake of COVID-19?

Thierry Léger Group Chief Underwriting Officer

About the front cover By accelerating the use Jakarta is Southeast Asia’s of technology and data in largest city. The Indonesian capital has a population our industry, we can bring of over 10 million people millions more people within and is a thriving economic hub. It is also exposed the insurance safety net. to a number of natural catastrophe risks.

In 2020, Swiss Re partnered with the Indonesian Ministry of Finance and a local insurer to build financial resilience around the Insurance will have a country’s public assets. central role in the process This is one example of how our research and data of rebuilding the global capabilities enable us to economy, protecting the create insurance solutions that strengthen societies. vulnerable and making the world more resilient. Contents How can Swiss Re at a glance 2 Message from the Chairman 4 partnerships Message from the Group CEO 8 help us close Market trends 12 Our business and strategy 16 protection gaps? Sustainability 18 Transforming Tomorrow Together 20 Moses Ojeisekhoba How can we build resilience Chief Executive Officer in the wake of COVID-19? 22 How can we use digital solutions to make insurance more accessible? 28 How can we work together How can we work towards net zero? 34 together towards How can partnerships help us close protection gaps? 40 net zero? Our people and culture 46 A discussion with Walter B. Kielholz 48 Christian Mumenthaler Board of Directors 52 Group Chief Executive Officer and Co-Chair of WEF’s Alliance Group Executive Committee 54 of CEO Climate Leaders Cautionary note 56 Contacts 58

You can only move forward when you move Our Annual Report together. Working with our partners, we build Our Annual Report consists of the Business Report and new relationships and the Financial Report: co-create new solutions.

Annual Report 2020 Annual Report 2020 Business Report Financial Report

Transforming Transforming Tomorrow Tomorrow Together Together A net-zero future is achievable. We are taking action to reduce our impact. And we will support others as they Business Report commit to reducing This publication explains the progress we made in executing on our strategy CO2 emissions. and describes the markets in which we operate, our culture and our approach to sustainability. We also share stories of how we tackle risk to make the world more resilient.

For more information

See our online Annual Report at https://reports.swissre.com

Swiss Re | Business Report 2020 1 Overview

Swiss Re at a glance

The Swiss Re Group is one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient.

Diversified and global

% Net premiums earned and fee income by region 32 USD bn EMEA 40.8 USD 12.9 bn (2019: USD 12.0 bn) (2019: USD 38.6 bn)

48% Americas % USD 19.5 bn 20 Asia-Pacific (2019: USD 18.2 bn) USD 8.4 bn (2019: USD 8.4 bn)

By business segment

51% P&C Reinsurance 34% L&H Reinsurance 10% Corporate Solutions 5% Life Capital

Financial strength AA– –3.1 % 7.3 % –1.1 % 7.4 % Standard & Poor’s Return on equity Return on equity Net operating margin Net operating margin (2019: 2.5%) (excl. COVID-19)1 (2019: 3.4%) (excl. COVID-19)1

Commitment to sustainability AAA 71% 35 % MSCI ESG rating Employee engagement Carbon intensity reduction target in (as of July 2020) (2019: 63%) our corporate bond and listed equity portfolio by 20252

1 These figures exclude the impact of claims and reserves established for COVID-19 and the associated estimated tax impacts. 2 With base year 2018.

2 Swiss Re | Business Report 2020 Reinsurance Proper ty & Casualty

Reinsurance provides clients and Net premiumpremiumss earned earned and fee income % % brokers with reinsurance products, ((USDusd billion billions)s) –2.8 13.2 insurance-based capital market solutions 2020 20.8 Return on equity Return on equity and risk management services.  (2019: 4.4%) (excl. COVID-19)1 2019 19.3 Reinsurance operates globally through two segments – Property & Casualty % % and Life & Health. 202Net incom0income/losse 20,8 ((USDusd billion millions)s) 2019 19,3 109.0 99.8 2020 –247 Combined ratio Combined ratio 1 20201 1257 (2019: 107.8%) (excl. COVID-19) 2019 396

Net income (usd billions) Life & Health 2020 –247 20201 1257 Net premiumpremiumss earned earned and and fee fee incom incomee % % ((USD201usd 9billion billions)s) 396 0.9 10.4 2020 13.9 Return on equity Return on equity (2019: 12.4%) (excl. COVID-19)1 2019 13.0

% % Net incomincomee ((USD202usd 0billion millions)s) 13,9 2.9 9.4 20220190 71 13,0 Net operating margin Net operating margin 1 20201 855 (2019: 10.0%) (excl. COVID-19) 2019 899

Corporate Solutions Net premiumpremiumss earned earned and fee income % % ((USDusd billion billions)s) –17.4 16.5 Corporate Solutions provides risk 2020 4.0 Return on equity Return on equity transfer solutions to large and mid-sized (2019: – 34.1%) (excl. COVID-19)1 2019 4.2 corporations around the world. Its innovative, highly customised products Net income/loss % % and standard insurance covers help 202Net incom0 e 4,0 to make businesses more resilient, ((USDusd billion millions)s) 2019 4,2 116.5 93.2 while its industry-leading claims service 2020 –350 Combined ratio Combined ratio 1 provides additional peace of mind. 20201 393 (2019: 127.9%) (excl. COVID-19) 2019 –647

Life Capital Net premiumpremiumss earned earned and and fee fee incom incomee % % (USD(usd billion billions)s) –7.5 –6.9 Life Capital supported and incubated 2020 2.0 Return on equity Return on equity entities in the B2B2C primary business, (2019: –3.4%) (excl. COVID-19)1 2019 2.1 B2B corporate business and the closed book consolidation space. Following Net incomloss e m the successful sale of ReAssure, the 2020 2,0 Life Capital Business Unit disbanded at (USD(usd billion millions)s) 2019 2,1 2 171 the end of 2020. Corporate Solutions 2020 –265 GPW open books has assumed responsibility for elipsLife, 20201 –243 (2019: USD 1 790 m) while iptiQ is now operating as a 2019 –177 standalone division.

1 These figures exclude the impact of claims and reserves established for COVID-19 and the associated estimated tax impacts.

Swiss Re at a glance Swiss Re | Business Report 2020 3 Message from the Chairman

Staying one step ahead in the business of risk

Dear shareholders, This is the last letter to shareholders that During my years in the business, external I will write to you as Chairman of the Board of Directors of Swiss Re. As you know, upheavals in the ‘real’ world have repeatedly hit I informed the Board of Directors last year the ‘financial’ world with force. And on each that I would not stand for re-election at the next Annual General Meeting in April 2021. such occasion, Swiss Re has had to react – and As I am turning 70 this year, it is time to has done so successfully. hand over my responsibilities.

On this occasion, please allow me to reflect briefly on 45 years of working in the reinsurance industry and on 32 years at Swiss Re in various roles. Based on my past experience, I would also like to provide my insights into 2020, an unprecedented year, as well as on the COVID-19 pandemic and the ensuing health, social, economic and ultimately also political crises.

The COVID-19 pandemic – risk is our business At Swiss Re, a major event like the pandemic, Walter B. Kielholz which has had both financial and operational Chairman of the consequences, is something we must always Board of Directors expect. During my years in the business, external upheavals in the ‘real’ world have repeatedly hit the ‘financial’ world with force. And on each such occasion, Swiss Re has had to react – and has done so successfully.

Sometimes, such upheavals were caused by fundamental changes, other times they were the result of predictable but exceptionally large events. Sometimes, they affected our investments, and sometimes our reinsurance and direct insurance business, but rarely all at the same time. It was extremely rare for events to come completely as a surprise. However, there often was at least one aspect of each such event that was not expected. This was no different in the case of COVID-19; I shall come back to this a bit later.

4 Swiss Re | Business Report 2020 Liability claims and the origins of our Natural catastrophes and the emergence commitment to sustainability of insurance-linked securities Dividend policy During the early years of my career, so in In the mid-1990s, after almost 30 years Swiss Re’s dividend policy is a the 1970s and early 1980s, but especially with no major storm damage in Japan or central element of Swiss Re’s after 1986, a massive wave of asbestos on the East Coast of the US (Betsy, a huge capital management priorities. and environmental liability claims in the US hurricane, made landfall in 1965), Typhoon crashed over the insurance industry. This Mireille (1991) and Hurricane Andrew The Group aims to grow the resulted in huge claims payments around the (1992) caused our clients, and by extension regular dividend with long-term world, especially for reinsurers. This also also us, massive losses. These storms were earnings or, at a minimum, posed a threat to the future of your company, the harbingers of a greatly increased maintain it. Swiss Re. We had to adapt to a completely frequency of natural catastrophes in , Dividend per share (CHF) new environment characterised by very Japan, Australia, the Caribbean and, above Dividend per share (CHF) aggressive plaintiffs lawyers in the US. It took all, the US. years for the US to bring the excesses of a 5.60 5.90 5.90 legal industry specialised in liability lawsuits Under the leadership of reinsurers – 4.85 5.00 under greater control. Swiss Re played a very important role here – the industry focused on better As a result, prices for liability cover rose understanding these risks. Risk models massively. Policies were restructured to allow for natural catastrophes were significantly for shorter run-off periods. To cope with the improved. New capital, primarily out of claims burden, Swiss Re had to take decisive Bermuda, was deployed to address the 2016 2017 2018 2019 2020 action and divested its large direct insurance global natural catastrophe risks, which now subsidiaries in Europe. The crisis also consistently commanded significantly higher destroyed some of the largest corporate premiums. Swiss Re recognised the resulting insurers in the US and a number of European opportunities early on, and the company’s 5,60 5,90 5,90 5,00 reinsurers; the centuries-old Lloyds of share price rose accordingly. Today, Swiss Re 4,85 business model collapsed, and is a market leader in this business, which, the Bermuda insurance market emerged. when viewed over a period of years, more Swiss Re’s share price rose by more than than covers the cost of capital. 500%, and the now smaller company took off. As a result of this experience, Swiss Re 2016 2017 2018 2019 2020 became the first reinsurer to start tapping Since then, one insight has always guided additional sources of capital. The idea behind us – an insight that has become increasingly this was to securitise risks to make them important and has defined us over time: tradeable. We developed – similar to unsustainable business practices in the real mortgage-backed securities (MBS) – the economy, whether with regard to the first cat bonds, so-called insurance-linked environment or when dealing with product securities (ILS). After experiencing growing risks, sooner or later lead to major losses pains for a number of years, this market has on insurers’ balance sheets. A resolute developed very well, and ILS are now a firmly commitment to sustainability is a ‘must’ for established financing instrument for Swiss Re, because sustainability means insurance risks. taking precautions and limiting future losses. This issue has become part of the economic mainstream, and our early commitment to sustainability thus greatly benefits the company today.

Message from the Chairman Swiss Re | Business Report 2020 5 Message from the Chairman

The dot.com crash, expansion in Swiss Re was the leading (re)insurer of the life reinsurance and disciplined World Trade Center, and the claims Swiss Re has an asset-liability management payments it made were correspondingly Towards the end of 2000 and the beginning large. At the same time, however, Swiss Re excellent reputation of 2001, the dot.com bubble burst. This made a name for itself far beyond the around the world, and marked the end of a euphoric period for industry by successfully defending itself in investors in stock markets, driven by court against excessive, even exorbitant its market position, exorbitant valuations for companies that, in claims – something that many other strategic focus, the one way or another, were doing something companies subsequently benefitted from. related to the internet, and often came up quality of its employees with the most abstruse business plans. 9/11 is probably the insurance event and its capital base This had to end badly – and it did, taking that is most comparable to COVID-19. It everything down along with it. demonstrated to the industry, but also to are outstanding. regulators and policymakers, that certain Many institutional investors participated in things can simply not be insured by private the bull market, and most of them benefitted capital alone: namely, when their magnitude from the bubble. Although everyone was cannot be rationally defined (for example, talking about the high level of risk in the in the case of a dirty bomb) and they are markets, only very few managed to exit them ultimately caused by politically motivated at the right time. European and Asian life reactions of governments. It is not insurance companies. in particular. had without reason that terrorism is described disproportionately large equity investments as a continuation of war that uses relative to their shareholders’ equity. They did asymmetric means. not have the financial strength to absorb the shock of the collapse in prices. Swiss Re, Swiss Re therefore had to systematically with a bit of luck, realised its gains in time exclude terrorism risk from its coverage. and was able to walk away with a relatively After this tragedy, you as shareholders would small loss. We consistently expanded life never have been prepared to use your capital reinsurance through further acquisitions, to cover such risks. No risk model, no matter and a second, strong pillar was thus created how elaborate, would have made it possible alongside the property/casualty segment. to price such a risk. Something very similar is currently happening with regard to As a result of the financial market turbulence pandemic risk. during those years, asset-liability management became an indispensable The financial crisis, or why a strong instrument for mitigating balance sheet risks capital base is essential in the insurance industry. This process aims So much has been written about the global to match maturities and liquidity needs on financial crisis of 2008 to 2009 that I can the asset side of the balance sheet with the be brief here. Institutional investors were liability side. Swiss Re, which has a larger massively impacted, banks went under and balance sheet (or more asset leverage) individual investors lost money on a very than most of its clients due to its business large scale. Again, the event itself was not portfolio, helped develop this tool from unexpected. But the magnitude, the the ground up and began to use it with interdependencies and the speed with increasing frequency. This development which the entire financial market collapsed encouraged a departure from the notion of took us by surprise – as it did many others. always trying to time the market correctly. But it was only after the global financial crisis The entire insurance industry was of 2008/2009 that the company began massively impacted on the investment side. to systematically manage its balance sheet Fortunately, the insurance business was very risks through asset-liability management. stable at the time. If I am to give an honest assessment, I must include the observation Terrorism and the limits of insurability that Swiss Re did not fare particularly well The industry had just come to terms with the during this crisis. A balance sheet inflated by dot.com crash when the terrorist attack on operating debt left the company vulnerable. the Twin Towers in New York occurred on The situation was further complicated by 11 September 2001. Terrorist attacks were the transition to fair-value accounting, which not new territory for us. Time and time again, had recently been introduced, and which Swiss Re had covered losses caused by transferred market volatility one-to-one to terrorist attacks. The sheer scale of the the balance sheet. attack on the World Trade Center, however, exceeded our scenarios many times over. Only very few people had the foresight to ever imagine such an event would happen.

6 Swiss Re | Business Report 2020 The measures we introduced at Swiss Re The COVID-19 pandemic, monetary the owners of nominal financial assets as a result of the crisis were unequivocal: and fiscal policy interventions, and their (savers, insurance companies) are slowly on the one hand, a disciplined approach potential consequences expropriated and debts are reduced just with regards to very strong risk-based This brings us to the present – to 2020 and as slowly. This is also called the erosion of capitalisation and excess liquidity; on the the COVID-19 pandemic. Our Group CEO, the value of money. I am certain, for various other hand, strict limits on our debt-to-equity Christian Mumenthaler, explains the reasons, that we will experience inflation. ratio. In other words, no extension of the consequences of this event in detail in his Not immediately, but soon. Not everywhere balance sheet that is not driven by the core letter. But allow me to make three general to the same extent, but certainly in the US. business, no matter how low interest on observations. Swiss Re is preparing for this scenario – debt may be. Despite this deleveraging of as always in an effort to protect the capital our balance sheet – or perhaps precisely First, the pandemic scenario for many of its shareholders. because of it – the Swiss Re share price years has been one of the key scenarios in recovered several times over in just a Swiss Re’s risk assessment. So the pandemic Thank you few years. was no surprise. In fact, due to our leading And now the time has come for me to say global position in life reinsurance, we were thank you. My thanks go to the employees However, against the backdrop of the prepared for far worse pandemic scenarios. of Swiss Re, who have supported me during experience gained during the financial crisis, However, to our surprise, the majority all these years and have always been it is surprising to see the degree to which of losses did not originate in this segment. committed to advancing the company. My the level of indebtedness is rising again Instead, the main losses originated in thanks also go to the business partners and around the world. Even if this chapter property and specialty lines. Because of the global network of representatives from appears to be closed, the end of the story the simultaneous responses of governments business, academia, politics, international has not yet been written. around the world, the losses accumulated organisations, NGOs and the media who as mitigation measures were imposed, such have worked with Swiss Re and me in a Climate change and the narrowing as lockdowns, travel restrictions and a full critically constructive and respectful manner the protection gap freeze of economic activity. We had to over the years. Above all, however, I would In the years that followed, climate change immediately restructure our risk portfolio like to thank you, our shareholders, who became increasingly prominent in the public based on this realisation (by excluding have remained loyal to Swiss Re all these consciousness. The frequency of small- and pandemic risk), which we achieved to a years, supported us through difficult times medium-sized loss events caused by storms, significant extent in a short period of time. and shared in our successes in good times. tidal surge and floods (referred to in the market as ‘secondary perils‘) increased Second, the industry withdrawal from I will be handing the reins over to Sergio markedly. This development and population pandemic coverage was unavoidable Ermotti, whom I wish every success in his growth in urban centres located by the sea because we once again reached the limits role – just as I wish the company as a whole make for a dangerous mix. of insurability. Without rapid and radical every possible success. And I am convinced countermeasures, we would have lost the that this success will be achieved. After all, Surprisingly, the industry did not react support of investors, or in other words, your Swiss Re has an excellent reputation around immediately but with a delay of several support. On the other hand, the massive the world, and its market position, strategic years. As is often the case with an increased government support measures in so many focus, the quality of its employees and its frequency of mid-size events, hope springs countries demonstrate how urgently we capital base are outstanding. All we need eternal. It was not clear if this increase was need to develop a plan to better cushion the now is a bit of luck. I will keep my fingers just a phase in the cycle or – as we now economic impact of another pandemic. crossed for you and Swiss Re! know – whether it was a long-term trend. Our societies must increase their resilience. Due to the numerous medium-sized losses, Swiss Re sees private-public partnerships as , 18 March 2021 not enough premiums remained to cover an opportunity to work with governments to major events. It took several years for the develop new types of coverage. At the same industry to respond to pressure from time, however, we must be clear in stating reinsurers and set about adjusting risk that such approaches cannot work without models and thus premium levels worldwide. a government backstop. The market correction is still underway and has gained further momentum. Third, money arising from fiscal measures Walter B. Kielholz has flowed in unimaginable quantities; Chairman of the Board of Directors Climate change has become a key risk money no longer costs anything, for many management issue, and this is something nations it costs less than nothing. This has that everyone should be taking into account. resulted in enormous disincentives and As the market leader in businesses massive market distortions. So how can compensating for losses related to climate national balance sheets be brought back on change, Swiss Re will be needed even track? How can this excessive liquidity be more, since the protection gap, namely siphoned off? Which government dares to the difference between insured losses raise taxes in the near future? Which central and actual total losses, is still large and bank dares to raise interest rates anytime is growing. soon? Politicians who wish to be re-elected will not support such actions. This leaves only one way out: the classic, tried-and- tested option of inflation, through which

Message from the Chairman Swiss Re | Business Report 2020 7 Message from the Group CEO

Swiss Re has gone through the crisis with confidence and strength

Dear shareholders, The COVID-19 pandemic changed Our Group went into this crisis with a very everyone’s lives, seemingly overnight. Swiss Re Institute estimates a cumulative strong balance sheet and capital position. Our global economic output loss of operations continued uninterrupted and we USD 12 trillion over 2020 and 2021 from the pandemic and the unprecedented wave

took a prudent approach to building reserves. of lockdowns around the globe. Some people have called this event a ‘black swan‘ – a concept for something that cannot be predicted. But it isn’t a black swan.

For decades, the insurance industry has warned of the potentially devastating effect of a pandemic. Thirteen years ago, Chief Risk Officers from the insurance industry, including me, co-authored a paper on influenza pandemics. We looked at the circumstances under which the 1918 Spanish flu broke out and asked what the impact would be if a global influenza pandemic happened again.

Christian Mumenthaler Many of the predictions we made in 2007 Group Chief sound almost eery today: we thought that Executive Officer an outbreak would likely start in Asia and quickly spread to other regions; the rapid spread could hamper timely preventive measures; and, central banks would react by lowering interest rates. If anything has changed since our assessment in 2007, it’s that the world has become even more interconnected, further increasing the likelihood of a pandemic spreading.

In spite of the warnings, most countries were not ready for COVID-19. Part of the explanation lies in behavioural economics: it requires a significant effort to intellectually anticipate and act on risks that one hasn’t personally experienced in the past. The means to be better prepared for pandemics were known, but the risk was considered too remote by many governments and other stakeholders. In the trade-off between current-cost optimisation and future resilience, the decisions too often favoured economic, not systemic, benefits.

8 Swiss Re | Business Report 2020 We need to draw lessons from this management actions to cut exposure to experience. While COVID-19 is still very fresh sectors that were vulnerable to COVID-19. in our minds, we have a unique opportunity As a result, impairments in the portfolio All of our businesses – if not an obligation – to build greater were very low at USD 27 million. resilience against future pandemics and have delivered strong other systemic risks. The re/insurance Our capital position remained very strong underlying performance industry alone cannot cover a risk that throughout 2020. As of 1 January 2021, hits many countries and areas of life the Group Swiss Solvency Test (SST) ratio in 2020 and are simultaneously. Public-private partnerships was at 215% – within our new target range confident of hitting are the only solution for future pandemic of 200–250%. The Group’s very strong preparedness. Swiss Re is working with capital position and positive outlook enabled their financial targets many countries to initiate such schemes the Board of Directors to propose a stable for 2021. and we are encouraged by early progress dividend of CHF 5.90 per share at the in this regard. upcoming Annual General Meeting.

We are also doing our part to help cover While some further COVID-19 losses are losses from the pandemic. Our Group went expected for 2021, we have dramatically into this crisis with a very strong balance reduced relevant exposures in property and sheet and capital position. Our operations casualty lines. All of our businesses have continued uninterrupted even when the vast delivered strong underlying performance majority of our employees had to work in 2020 and are confident of hitting their remotely. From the start of the pandemic, financial targets for 2021. we took a disciplined and prudent approach to building reserves, as actual claims have Property & Casualty Reinsurance (P&C Re) been slow to come in. improved its normalised1 combined ratio to 96.9% in 2020 from 98.4% in the In total, claims and reserves for COVID-19 previous year. P&C Re continued to focus amounted to USD 3.9 billion across the on underwriting quality and improved Swiss Re Group in 2020, and resulted in a terms and conditions in the January 2021 Group net loss of USD 878 million for the renewals, achieving a nominal price increase year – our first annual loss since the global of 6.5%, more than offsetting lower interest financial crisis of 2008. Excluding the impact rates and higher loss assumptions. The from COVID-19, our Group net income successful renewals allow for an improved amounted to USD 2.2 billion, a significant normalised2 combined ratio estimate of less increase from USD 727 million in 2019. than 95% for P&C Re for 2021.

Our Group has gone through this crisis with confidence and strength. We acted early in 2020 to protect our balance sheet from market turmoil with hedges. The strong 3.5% return on investments we achieved for the year also reflects decisive portfolio

1 Assumes an average large natural catastrophe loss burden and excludes prior-year reserve developments as well as the COVID-19 impact for 2020 and the Adverse Development Cover with Corporate Solutions for the 2019 figure. 2 Assumes an average large natural catastrophe loss burden and excludes prior-year reserve developments as well as the COVID-19 impact.

Message from the Group CEO Swiss Re | Business Report 2020 9 Message from the Group CEO

Life & Health Reinsurance (L&H Re) Having only started the iptiQ business maintained its strong underlying in 2016, its market-implied valuation While Reinsurance performance in 2020, with return on equity, has already grown to approximately remains our key excluding the impact of COVID-19 losses, USD 2 billion, based on the current growth at 10.4%. The segment also reported strong trajectory and peer valuation. The growth earnings contributor in growth in net premiums earned of 6.9%, of iptiQ is a perfect example of a new field the foreseeable future, driven mainly by longevity deals. We of business for us which goes beyond continue to see attractive opportunities traditional risk transfer. Namely, we are we are also seeing to grow our L&H Re business, particularly combining our risk knowledge with the more opportunities to in high-growth markets and through smart use of data and technology to create large transactions. insurance solutions for our partners. capitalise on the synergies among our Corporate Solutions is well ahead of plan In line with this approach, Corporate in its turnaround, thanks to the decisive Solutions is also evolving from a pure risk businesses and management actions announced in 2019 taker in the broad corporate insurance approach the future and more positive market movements than market to a much more specialised and originally anticipated. The Business Unit has focused business, which provides as ‘One Swiss Re’. largely achieved its planned portfolio pruning complementary access to corporate clients and gross cost reductions. Together with for the Swiss Re Group. For example, rate increases of 15% over the past year, this thanks to its long-established relationships, has lowered the normalised3 combined ratio Corporate Solutions gave access to partners to 96.8% in 2020, well ahead of the 105% such as BMW and Daimler for Reinsurance estimate for the year. Given the tremendous Solutions and IKEA for iptiQ, to name progress so far and favourable market just a few. expectations, Corporate Solutions will now target a normalised combined ratio of less Therefore, while Reinsurance will remain than 97% in 2021, compared with the our key earnings contributor in the original 98% goal. foreseeable future, we are also seeing more opportunities to capitalise on synergies With the completed sale of ReAssure to among our businesses and approach the , we delivered on another future as ‘One Swiss Re‘ with strong Group strategic milestone. Swiss Re received a foundations. We remain flexible towards cash payment of GBP 1.2 billion and shares creating new businesses and partnerships, in Phoenix representing a 13.3% stake, based on our competitive strengths. We are which we believe maximises value for convinced that this will position Swiss Re Swiss Re’s shareholders. for success over the long term, even as re/insurance markets change and evolve. As a result of the sale, we decided to simplify our legal entity structure by disbanding We are also focused on building a truly the Life Capital Business Unit. Corporate sustainable business. We have committed Solutions has assumed responsibility for to reaching net-zero emissions from our own elipsLife, which provides life and health operations by 2030 and made the pledge insurance solutions and services for to transition our investment and underwriting corporate clients, while the white-labelling portfolios to net zero by 2050. To help digital insurance platform iptiQ is now curb our operational emissions, as of 2021 operating as a standalone division, enabling we stepped up our internal carbon levy a greater focus on this business. After to USD 100 per tonne and will gradually increasing the number of partners by 11 increase it to USD 200 by 2030. and achieving 76% premium growth in its core business in 2020, iptiQ is on track to becoming a leading player in its field.

3 Assumes an average large natural catastrophe loss burden and excludes prior-year reserve developments as well as the COVID-19 impact.

10 Swiss Re | Business Report 2020 On the underwriting side, we tightened our With tailor-made risk-transfer options, policies for providing re/insurance support the re/insurance industry can provide data to businesses with thermal coal, oil and gas for climate adaptation, protect businesses, exposure. In Asset Management, we set a individuals and governments against target to reduce the carbon intensity of our catastrophes and support low-carbon listed equity and corporate bond portfolio and carbon-removal technologies in the by 35% by 2025. We also aim to increase green transition. our investments in renewable and social infrastructure by USD 750 million by the The year 2020 has not been an easy one, end of 2024. but we are looking ahead with confidence in our business and resolve to continue working These are just a few examples of measures towards our vision – to make the world more we are taking to transition to net zero, resilient. I would like to thank our employees and I invite you to have a look at our for their engagement and dedication in these Sustainability Report 2020 as well as our unprecedented times. They had to work from climate-related financial disclosures in the home, sometimes in challenging personal Financial Report 2020 for more details. situations, and ensured that we didn’t miss a beat. Beyond our own net zero commitments, Swiss Re is actively involved in the work of I would also like to thank you, our the ’s Alliance of CEO shareholders, for your continued support. Climate Leaders, which I have the privilege of co-chairing. In this alliance, we are working Zurich, 18 March 2021 together with other CEOs around the globe to make the transition towards a low-carbon economy possible. Businesses have vast resources to address the climate crisis if they come together, and I am very encouraged by the strong commitment I am seeing from many of my fellow CEOs. Christian Mumenthaler Group Chief Executive Officer COVID-19 lockdowns may have reduced CO2 temporarily, but they will neither stop global warming nor reverse the harm greenhouse gas emissions are causing to our planet and its natural ecosystems. I am looking forward to supporting the climate transition through the work we do at Swiss Re as well as my engagement in the WEF Alliance.

Message from the Group CEO Swiss Re | Business Report 2020 11 Market trends

Our market context

In 2020, COVID-19 significantly changed our market context, while ongoing trends such as climate change, digitalisation and low interest rates influenced our strategic decisions.

COVID-19 has been the major economic For environmental trends, clearly, climate influence in 2020. It caused the sharpest change remains the most significant global recession since the end of World long-term global risk. Governments, War II, requiring a rapid response from communities and businesses continue to governments, businesses, insurers and deal with a vast array of challenges arising individuals across the globe. from a warming planet, such as how to ensure food security or manage urban Yet COVID-19 was not the sole influence infrastructure. on our markets and the environment in which we operate. This section looks beyond At the same time, greater climate the pandemic and into key challenges and consciousness is leading to new business opportunities in our market. These can be opportunities. For example, greener broadly categorised across three thematic technologies are being developed areas: technological, environmental and to replace carbon-intensive industries. socio-economic trends. In terms of socio-economic trends, the For technological trends, the ongoing continued shift of economic gravity from digital revolution is fuelling opportunities the West to the East has also not abated for our industry. The evolution of mobile and is significant for the future growth of communication, global interconnectivity our industry. This shift is creating new wealth and the use of data has totally transformed for billions of the world’s citizens as new the way we communicate, travel, shop economic opportunities emerge. It is also or even maintain personal relationships. creating larger risk exposure as more and more communities are accumulating wealth Digital technologies are empowering millions in areas exposed to natural catastrophes. and fuelling insurance growth. They are also bringing about new forms of cyber risk As a leader in our industry, we will continue that our industry needs to address through to rise to the challenges, providing the new products and improved underwriting. foresight and solutions for our partners.

12 Swiss Re | Business Report 2020 Challenging economic COVID-19 will accentuate some of the The GDP shock in 2020 is disinflationary, environment important economic trends of the past few but the risk of future rising prices has years. Governments are supporting their increased due to fiscal stimulus, potential domestic economies with stimulus for debt monetisation and acceptance % packages, which are helping to ease the of higher inflation as a policy choice. 4.1 crisis in the short term, but these packages Even if inflation is a looming threat for estimated decline will also lengthen the periods of high public the future, we believe that the low in global GDP in 2020 debt. The Institute of International Finance interest rate environment will persist. (Source: Swiss Re Institute) indicates that global debt has surged by over USD 15 trillion since 2019 to nearly Our strategic response USD 275 trillion in the third quarter of 2020, On the asset side, portfolio diversification resulting in the all-time high global debt-to- and a highly disciplined investment % GDP ratio of approximately 365%. High approach are critical in the persistently 4.7 public debt levels can adversely affect the low interest rate environment. In 2020, estimated global ability of governments to spend over the we focused on higher quality fixed-income GDP growth in 2021 long term. This in turn can reduce insurance investments and hedging activities to (Source: Swiss Re Institute) demand, for example, through fewer large counter the financial market turmoil during construction and infrastructure projects. the first half of the year.

The world economy is experiencing the Swiss Re’s Responsible Investing approach, deepest recession of our lifetimes, but the focusing on companies with a better introduction of COVID-19 vaccines means environmental, social and governance that the risks to the outlook are now more (ESG) profile, makes economic sense balanced. Swiss Re Institute forecasts global as it improves risk-adjusted return profiles GDP growth of 4.7% in 2021, reflecting and reduces downside risks, especially our belief that much of the worst of the over the longer term. economic impact is already behind us.

Climate change Recent natural catastrophes, including a wide range of perils and regions. We severe hurricanes, typhoons, widespread continue to heavily invest into natural droughts and wildfires, demonstrate the catastrophe risk research, including ~ % forceful financial impact of climate-related assessing and quantifying the impacts of 55 risks on the insurance industry. The trend climate change on the natural perils risk of economic losses from natural of urbanisation, combined with higher value landscape. We provide our knowledge and disasters were uninsured in 2020 concentration in exposed regions such services to our clients to tailor and develop (Source: Swiss Re Institute) as coastal areas, is increasing the potential industry-leading risk transfer solutions. impact of natural disasters. The effects of climate change and global warming are As a company, we are committed to USD per tonne evident: warmer average temperatures, sustainability. We have been consistently 100 rising sea levels, melting ice caps, longer and vocal in the public domain about the threat our internal carbon levy as of 2021, more frequent heatwaves, erratic rainfall of climate change. As an early proponent rising to USD 200 per tonne by 2030 patterns and other weather extremes. The of sustainable investing, we were among global lockdown due to COVID-19 may have the first to adopt stringent environmental, reduced greenhouse gas emissions for a social and governance (ESG) criteria for brief moment, but it will clearly not stop our asset portfolio. In 2018, we stopped global warming. providing re/insurance to businesses with more than 30% thermal coal exposure. Our strategic response As of 2021, we introduced an internal Swiss Re’s history is rooted in providing the carbon levy of USD 100 per tonne, which capacity to protect societies around the will increase to USD 200 per tonne by 2030. globe against the financial impact of natural Ultimately, we are evolving our business catastrophes. Over the years, Swiss Re practices with the aim of producing net-zero has developed a unique set of data and carbon emissions by 2050. proprietary risk knowledge. This allows us to optimally steer and assess risks across

Market trends Swiss Re | Business Report 2020 13 Market trends

The great pivot East The trend of a growing middle class in insurance. Out of the respondents, 78% were continues high-growth markets remains strong. willing to sacrifice eating out, 57% would The world’s two most populous countries, give up gym membership, and just 14% were China and India, combined are forecast to willing to sacrifice insurance coverage. % represent over 43.3% of the global middle 16 class by 2030. Our strategic response net premiums earned by Swiss Re Swiss Re is well positioned to leverage in high-growth markets in 2020 The growth of the Asian middle class will the opportunities arising in Asia. For many foster spending and inherently increase years we have been working with insurance protection needs. Insurance spending in companies and brokers in Asia to provide % China has increased in both life and non-life a broad range of reinsurance products and 9.1 lines of business. As a result, China already services. In 2020, 16% of our net premiums forecast insurance premium became the second largest insurance earned were generated in high-growth growth in China in 2021 market in the world in 2018. Additionally, markets, and Asia contributed over half (Source: Swiss Re Institute) most emerging markets demonstrate of our high-growth market premiums. large insurance purchase potential. We are currently the largest foreign reinsurer Increased risk awareness due to the in China. Our historical presence in China COVID-19 pandemic is expected to and other key growth regions provides us accelerate insurance market growth in Asia. with privileged access to clients and A Swiss Re COVID-19 consumer survey partners. As a sign of our commitment to conducted in major APAC markets in April thought leadership in the Chinese market, 2020 found that people were likely to cut we also opened the Swiss Re Institute other expenses before they gave up their China Centre in Beijing in 2019.

Cyber risk Cyber security is a top priority for every 2025. However, many of the risks involved organisation as they adapt to the post- are not yet fully understood and are COVID-19 world. The identities and devices changing. Businesses are asked to put risk USD bn of remote workers represent a new and management frameworks in place to 20 growing security risk. Cyber attackers have manage cyber exposures. So-called “silent” estimated cyber insurance been quick to target the unprotected digital cyber risks, together with the explicit market by 2025 spaces created when tens of millions of coverage of cyber can lead to a risk (Source: Swiss Re Institute) employees began working from home. accumulation on re/insurers’ balance Overall, the shift from human intervention sheets. This needs to be understood and to software-enabled processes is driving actively managed. >USD bn efficiency and convenience, but it also creates new risks. In terms of insurance opportunity, demand 150 for insurance protection continues to rise estimated growth in The nature of cyber attacks is also changing. rapidly. However, cyber continues to be global cyber security market For example, according to US IT security largely a preventative market, enabling to USD 326 billion by 2027 company Malwarebytes, the number of clients to develop a strong defence against (Source: Grand View Research Inc.) ransomware incidents actually fell slightly in attacks. A strong trend is for insurers to 2019, but they were more sophisticated and partner with cyber security companies and damaging. We are also seeing the rise of develop offerings that span both prevention new, potent forms of digital misinformation, and financial risk transfer. such as “deepfakes”, which can fabricate digital content with the help of machine Our strategic response learning and artificial intelligence. Swiss Re provides the global cyber market with risk capacity and methods to assess, This is all leading to the development of a quantify and mitigate risks. We continue new and growing market for cyber to develop cyber solutions that allow insurance. Swiss Re Institute forecasts organisations and individuals to access premiums for cyber insurance to grow from state-of-the-art insurance and risk USD 5.5 billion in 2020 to USD 20 billion in management support.

14 Swiss Re | Business Report 2020 Digital innovation Digitalisation and related technologies Over 4 billion people are connected online, have fundamentally altered how we interact 90% of whom are connected via mobile > bn and manage our lives. This has enabled devices. With adequate analytics 4 the creation of new offerings and the capabilities, insurance companies can people are connected online optimisation of processes across all sectors benefit from this vast amount of data. (Source: Swiss Re Institute) and industries. These technologies became Technology is now enabling better even more important during and following monitoring and modelling of risks and is the COVID-19 lockdowns – for example, by optimising risk management, loss prevention % enabling growth in online business models. and pricing. The insights gained from data allow insurers to provide customers with 59 Prior to the COVID-19 outbreak, insurance more flexible and personalised products of insurers are forming relationships was, on average, lagging behind other and services, and to make offerings more with non-traditional partners industries in terms of digitalised service efficient and affordable. such as e-commerce, retail or offerings. While many people use the automotive companies internet to research insurance, relatively Our strategic response (Source: Accenture) few purchases are made online. Increased Co-developing solutions is at the heart of demand for online services may favour our strategy. Examples include the creation competition from insurtech start-ups and of our Digital Market Center with Microsoft countries tech-savvy players entering the markets to create risk management and insurance 26 if traditional players are not able to gain solutions that go beyond traditional in which Magnum, momentum. In Swiss Re’s 2020 APAC insurance product development. Other Swiss Re’s automated consumer survey, respondents said they areas include new automotive solutions – L&H underwriting platform, wanted insurers to process policies and especially in the area of Advanced Driver is available claims entirely online. Assistance Systems (ADAS). iptiQ, our digital insurance platform, enables both The level of connectivity across the globe insurance and non-insurance partners is vast and the sheer amount of data enables to advance the digital distribution effective networking capabilities. of insurance.

Longevity and medical The speed of medical innovation in recent Our strategic response years has been remarkable. For example, Swiss Re is the largest life and health innovation the first COVID-19 vaccine was in use less reinsurer globally and has deep knowledge than a year after the first reported infections. of health and mortality risks, using data % to create unique risk and portfolio insights. 15.9 Improved vaccines and public health Through our dedicated research and share of population aged programmes impact our life expectancy. development activities, we are in a strong 65 and older by 2050 WHO data indicate an global average life position to lead change in the industry. (Source: United Nations) expectancy of nearly 73 years in 2020, up from 67 years in 2000. A big challenge To better understand the impact of health for society is that the global share of people and lifestyle factors, in 2020, we expanded years aged 65 and older is expected to rise from our research into six key lifestyle factor areas, 9.3% in 2020 to 15.9% by 2050. Ultimately, with the aim of harnessing what they mean 73 this puts more pressure on healthcare and to the insurance industry. Our work combines global average life expectancy in 2020 pension systems. the power of new data and casualty models (Source: United Nations) with our underwriting expertise. The long-term health impact of the COVID-19 pandemic is also a concern for Using our capacity, technical expertise % our industry. We have already seen that and diversification within the life and health 48 COVID-19 has the potential to leave portfolio, we provide our clients with growth of global health recovered patients with long-term health bespoke risk transfer solutions – for example, data volumes annually impairments, such as permanent lung in the area of longevity – where tailored (Source: International Data Corp.) damage. The side-effects of COVID-19 transactions supported life and health survival are still largely unknown, resulting in premium growth for Swiss Re in 2020. greater uncertainty around potential claims.

Market trends Swiss Re | Business Report 2020 15 Our business and strategy

Our business and strategy

We have evolved our business and strategy to enable sustainable growth over the long term.

During 2020, Swiss Re’s Group Executive The outcome is a refreshed and sharpened Group Committee conducted an assessment of strategy that builds on our existing strengths and Swiss Re’s business model and strategy. our key convictions about the future.

What we do he world mo ke t re Our purpose is to make the a res m ili world more resilient. We do e en this by placing our clients and W t partners at the centre of our business. We address risks across the global economy Risk in three ways: Partnerships 1. Transfer: Risk Reducing our clients’ Clients Insights and risk exposure and that Partners of their customers 2. Insights: Helping our clients better understand and take risks 3. Partnerships: Risk Working with others to find Transfer new and innovative ways to process, transfer and distribute risk

• We link our strategy Risk transfer Risk insights Risk partnerships to our purpose We work with our clients and Our research, solutions and tools Through strong partnerships, we partners to re/insure against large enable an improved understanding create platforms to process, transfer • We put our clients and losses. Types of risk transfer include: of risks and opportunities. We are and distribute risks. This includes partners at the centre traditional property and casualty and leveraging new technology, access to capital markets, business- • We expand our mandate life and health re/insurance; large specifically data and analytics to-business-to-consumer (B2B2C) beyond risk transfer and complex transactions; and capabilities, to further our ability to products and new ecosystems. public sector risk transfer, where offer services and risk insights that we work with governments. help our clients and partners make more data-driven decisions and take risks. Our platforms include: • Swiss Re Institute • CatNet® • Magnum • SwiftRe®

16 Swiss Re | Business Report 2020 How we do it One Swiss Re We act as “One Swiss Re”, leveraging strengths and capitalising on synergies across Reinsurance our businesses as we become a more integrated Group. Reinsurance is in the centre as the core of our business, alongside Corporate Solutions, Corporate a specialised risk partner for Solutions corporate clients, and iptiQ, iptiQ a digital B2B2C insurance platform. We have specific strategic priorities for each business segment. Risk Knowledge Client Collaboration The business segments are Leadership & Access supported by the Group foundation, with our people Capital Strength as the key asset driving the performance of the Group, O e along with Swiss Re’s three ur Peopl competitive differentiators.

• Reinsurance is our Our people Our competitive differentiators core business Our people form the basis of We focus on three differentiators: % everything we do, with our attitude • Our capital strength, with one 200–250 • We act as “One Swiss Re” target Group SST range and mindset playing a critical role capital base and a streamlined from 2021 based on one foundation in how we execute on our strategy legal entity structure

• We remain flexible towards • One client approach and access ~ creating new businesses 13 189 to public sector and corporate 11 000 mid-sized and large employees across partnerships corporate clients the Swiss Re Group • Our established leadership in as of 31.12.2020 risk knowledge, including our > Swiss Re Institute 250 research notes and publications in 2020

Our business and strategy Swiss Re | Business Report 2020 17 Sustainability

Sustainability at Swiss Re

Our Group Sustainability Strategy supports our purpose and ensures Our 2030 sustainability ambitions Our principles We have set ourselves three ambitions We have defined three principles that our business remains for 2030: we will help mitigate climate that guide how we implement the sustainable over the long term. risk and advance the energy transition; Group Sustainability Strategy when we strive to strengthen societal conducting business. We embed resilience with our re/insurance sustainability in all of our business solutions and investments; and we activities, develop sustainability-linked For us, sustainability is a strategic, long-term make insurance more available and solutions and embrace opportunities, value driver and we embed this approach affordable through digital solutions and we quantify sustainability throughout our re/insurance value chain. and risk knowledge worldwide. performance and impact. Sustainable re/insurance spans both the liability and the asset sides of our balance Our sustainability topics How we report sustainability sheet, as well as our own operations. These sustainability ambitions create Alongside the stories from across It is also a key topic in our dialogue with broad focus areas for our work. In Swiss Re contained in this report, stakeholders. addition, we have specified six topics we encourage you to look at our that guide our efforts in driving 2020 Sustainability Report at Major challenges that undermine sustainable Swiss Re’s sustainability performance. https://reports.swissre.com/ development, such as climate change sustainability-report/2020 or health funding gaps, can weaken resilience because they create new risks or aggravate existing ones. Our focus on sustainability seeks to identify and address these challenges and to support sustainable progress in partnership with Swiss Re’s Group Sustainability Strategy our clients.

Our 2030 Our sustainability principles ambitions Mitigate Embed climate risk and sustainability advance the energy in all of our business transition activities

We insure, invest, Build Lead operate and share societal sustainability- our knowledge in resilience linked solutions a way that tackles and embrace sustainability opportunities challenges and creates long-term value

Drive affordable Quantify insurance with sustainability digital solutions performance and impact

18 Swiss Re | Business Report 2020 Creating solutions for sustainability

An important element of our sustainability earthquakes, while also helping to finance strategy is creating solutions that help our development projects. Swiss Re often clients and their customers deal with supports such partnerships through its environmental and social issues. We focus alternative capital instruments. For example, on areas such as climate change, renewable we issued catastrophe bonds with the energy, agriculture, health and infrastructure. Mexican government and the World Bank. We are also driving the expansion of digital solutions that can increase the access, We provide solutions to de-risk renewable availability and value of insurance. energy projects, such as the construction of wind farms or large solar energy projects, In many ways, this work is intrinsic to our enabling the energy transition. traditional re/insurance protection. For example, our core natural catastrophe Our digital solutions can address broader business is clearly linked to helping society societal issues, such as the prevention and recover from climate-related events. management of type 2 diabetes. In tackling these issues, we are extending the value Our public-private partnerships facilitate of insurance in people’s lives beyond simple recovery efforts following hurricanes and financial risk transfer.

Making progress on key topics

Investing responsibly Managing sustainability risks Engaging our people By financing green solutions, we support We manage ESG risks across Swiss Re’s We are an organisation where diverse climate change mitigation and the balance sheet. In 2020, we began talents come together globally to apply transition to a net-zero emissions economy. assessing the carbon footprint of our direct fresh perspectives and knowledge. For this, insurance book, building the foundation to it is imperative that we build an engaged, reach net zero in our underwriting by 2050. inclusive and agile organisation.

USD2.3 bn 1 2 0 81% green government estimated weighted average carbon of our employees agree that and corporate bonds intensity of our direct insurance Swiss Re provides an open and (2019: USD 1.8bn) portfolio, measured in tonnes of CO2 inclusive work environment equivalents per million USD of revenue (2019: 68%)

Driving sustainable operations Ensuring good corporate Fostering resilient societies We lead by example and work to minimise governance and compliance Swiss Re Foundation partners with NGOs, the environmental impact of our operations. We conduct business ethically and with social entrepreneurs, foundations and We have been a climate-neutral company integrity, complying with all applicable academic institutions. It leverages the since 2003. Bringing our CO2 emissions laws and regulations to safeguard the trust expertise of Swiss Re employees and to net zero by 2030 is our next key target. our clients place in us. collaborative networks to help communities increase their resilience.

100 % 90% CHF5.36m of Swiss Re operations powered of employees agree their colleagues act committed to 82 partners in 29 by renewable electricity ethically and with integrity countries to support COVID-19 response (2019: 92%) (2019: 86%)

Sustainability Swiss Re | Business Report 2020 19 Transforming Tomorrow Together

Our purpose is to make the world more resilient. Itʼs what we do. And in a world facing unprecedented upheaval, it’s now more important than ever. Now is the time to rethink old ways, adopt forward-looking approaches and work together to reshape our industry. On the following pages, youʼll read about how we have been doing this and working to transform tomorrow together.

20 Swiss Re | Business Report 2020 Transforming How can we build resilience in the wake of COVID-19? Page 22

Tomorrow How can we use digital solutions to make insurance more accessible? Page 28

How can we work together towards net zero? Page 34

Together How can partnerships help us close protection gaps? Page 40

Transforming Tomorrow Together Swiss Re | Business Report 2020 21 22 Transforming Tomorrow Together Tomorrow Transforming Re Swiss |

Business Report 2020 Report Business Transforming In 2020, our role in It has been a challenging year; How can we the COVID-19 pandemic caused helping make the widespread lockdowns, travel world more resilient restrictions, business interruption build resilience and social distancing. Our became critical. We financial strength, combined provided support to with our powerful research and in the wake data capabilities, put us in a societies through our position to be able to support financial strength, our partners during these of COVID-19? innovative solutions difficult times. and risk knowledge. As a leader, we will focus on going beyond insurance and finding solutions that help our partners to do so. In this section, we look at how we have supported our clients over the year, worked with governments and stayed one step ahead through our sophisticated pandemic research and risk modelling.

How can we build resilience in the wake of COVID-19? Swiss Re | Business Report 2020 23 22 Transforming Tomorrow Together Tomorrow Transforming Re Swiss |

Business Report 2020 Report Business Transforming the world more resilient. the vulnerable and making the global economy, protecting role in the process of rebuilding Insurance will have acentral Officer Underwriting Chief Group Léger Thierry resilient societies. developing in role our play we change, driving By face. they that risks new the and customers our with step in key are we to stay if also is Innovation partners. and clients our with learnings our share and to learn continue we reason, this For unique. is client, like every event, every that know we company, but knowledge We are arisk innovating. and knowledge sharing capacity, providing losses, agreed of covering role our fulfilling by partners and clients our for We care different. no been has pandemic COVID-19 the respect, this In expertise. and strength financial our with times challenging through clients our 150 supported than have we more For years, societies our strengthen to together Learning

How can we build resilience in the wake of COVID-19? Swiss Re | Business Report 2020 23 Transforming Tomorrow Together

A strong partner for our clients

For more than 150 years, the COVID-19 pandemic. Our experts this knowledge and pandemic expertise went through a very detailed and thorough with our clients through webinars and online Swiss Re’s financial strength analysis to arrive at this figure because the meetings. We also actively engaged with and risk expertise have level of actual claims has so far been low. governments around the world to develop solutions to ensure that we, as a society, enabled us to support our On the P&C side, our teams collected are better prepared for the next pandemic. clients through many global bottom-up data from clients, actively researched cancelled or postponed crises. During the COVID-19 events, made a detailed analysis of pandemic, Swiss Re was contract wordings and integrated Strengthening the commitment assessments from internal and external to our clients in 2020 again a strong partner that legal counsel. On the L&H side, a different our clients and partners team built a top-down mortality model, USD bn % could rely on. based on emerging population data across 3.9 80 the world and progressively refined it COVID-19-related IBNRs1 P&C Re 2020 Our teams of experts have been actively as more granular data became available. claims and reserves COVID-19 reserves monitoring developments and collecting This COVID-19 process was ongoing data since the first cases of infection with USD bn USD m the novel coronavirus were reported in throughout 2020. It also ran in parallel to 1.9 999 China, long before COVID-19 was officially a record number of large loss assessment COVID-19 claims and COVID-19 claims and declared a pandemic. As the situation processes, which were triggered by reserves: P&C Re reserves: L&H Re unfolded, Swiss Re’s strong global crisis the extraordinary number of hurricanes management set-up and robust IT in the North Atlantic. In total, the team infrastructure kept the business running conducted 13 such assessments; more USD m % without any operational disruptions, even than 2018 and 2019 combined. 943 200–250 COVID-19 claims and within new Group as most employees had to work from home. reserves: Corporate SST target range as Swiss Re staff continued to handle claims, Apart from analysing Swiss Re’s own Solutions of 1 January 2021 renew contracts, share their knowledge exposure, our pandemic experts and innovate. developed the Risk Resilience Center in partnership with Palantir Technologies, 1 collecting health, economic and social “Incurred but not reported” reserves for events that In total, Swiss Re set aside USD 3.9 have occurred but the client has not yet filed a claim. billion in 2020 to pay for claims related to data onto one unique platform. We shared

Securing lines of credit for SMEs In emerging markets, access to local credit is critical for small and medium-sized enterprises (SMEs) as they employ the vast majority of the local workforce. Due to COVID-19, many local banks were forced to freeze or restrict lending in 2020, as their access to financing dried up.

To combat this problem, the International Finance Corporation (IFC) developed a rapid response facility that provides financing to local banks, who in turn offer loans to local SMEs.

Swiss Re is a global leader in the credit and surety business. Through our Corporate Solutions Business Unit, and in conjunction with a panel of other insurers, we support the IFC by sharing underlying credit risk for the facility.

24 Swiss Re | Business Report 2020 Working with governments Q. Why are public-private by such an event. The private partnerships so important insurance market has the to insure widespread in addressing a pandemic? deep client relationships and societal risks A. Unlike natural disasters, industry expertise to make pandemics are of a global that happen. To address the insurability of systemic nature and this pandemics and create a more makes them uninsurable on Q. Will there be closer sustainable risk-sharing model a purely private basis. For public-private sector for such a scenario, public-private example, the loss in economic collaboration to make partnerships (PPPs) are key. Ivo output over 2020 and 2021 society more resilient? Menzinger describes how PPPs due to COVID-19 is estimated A. Swiss Re is actively help to plug the protection gap at USD 12 trillion, far engaged in discussions and explains what Swiss Re is exceeding the capital of the with governments, doing in this rapidly evolving area. entire insurance industry. legislators, regulators and As a result, governments are the insurance industry to called upon to absorb the share its experience in majority of financial risk. establishing new risk-sharing arrangements. As experts Q. How do PPPs work in in parametric insurance relation to pandemic solutions and technological insurance? innovation, this year A. There are three essential Swiss Re successfully closed elements: prevention and more than 30 new PPP preparedness; intervention transactions. In doing so, we and emergency management; participated in supporting and financing. Re/insurance food security in India, plays an important role Vietnam and Kazakhstan, through its risk knowledge. and enhancing disaster Furthermore, it is vital to resilience in Morocco, Puerto ensure that financial support Rico and Indonesia, as well – whether public or private as facilitating investment in Ivo Menzinger – gets to those enterprises housing through credit life Head Public Sector Solutions EMEA that are significantly impacted products in Ghana.

Opening up Life Guide to clients The team continues to update Life Guide As the pandemic took hold, Swiss Reʼs L&H as more research emerges on COVID-19. underwriting team opened access to Life For example, in the third quarter of 2020, Guide, Swiss Reʼs market-leading life and we included new guidance for individuals health underwriting manual. The 90-day free participating in vaccine trials and offer helped more life and health insurers considerations for broader antigen and address the emerging risks associated antibody testing. with COVID-19. By applying our global perspective and 29 research, Swiss Re was the first to provide life and health insurers benefitted this underwriting guidance. Many clients from accessing Life Guide cited this as critical support that gave them greater confidence in their underwriting days decisions, as the world continued to discover 90 more about the virus and its effects. free period for Life Guide

How can we build resilience in the wake of COVID-19? Swiss Re | Business Report 2020 25 Transforming Tomorrow Together

MODELLING PANDEMICS

Virus Variables and characteristics calibrations Eg ability to The virus’s impact spread, mutations on different age and lethality of groups, different new viruses. infection rates, etc.

Output 50 000 scenarios modelled SIMULATED For our stress testing, we use PANDEMIC aggregated scenarios to calculate the impact of a one-in- 200-year pandemic on a model mortality book.

Demographic Available characteristics interventions Global population Hospitals, data split by age, vaccinations, gender and antibiotics. target regions. A global leader in pandemic modelling

Swiss Re’s pandemic How the model works The output from this scenario analysis can be Our pandemic model uses large data sets applied to our existing life portfolios to stress model is an important tool to calculate the likely losses from different test what our financial position would be. for steering our business – pandemic scenarios. It is based on both the characteristics of diseases that could result COVID-19 and our model and a cornerstone of our in a pandemic and society’s ability to cope It is important to remember that the model financial strength. with any given pandemic event. is not a predictive tool for the eventual costs of COVID-19 or any other pandemic, but The model draws on data around which is a tool to understand the impact of certain Origins of the model viruses might cause a pandemic, how scenarios on our financial strength. The SARS epidemic in the early 2000s quickly they can spread and how lethal showed the importance of understanding they are likely to be. It then incorporates Going forward, the huge influx of knowledge how pandemics affect our balance sheet. insights on available medications that might that we acquired in 2020 will flow into the decrease the rates of infection and the model, allowing for further refinements. Created in 2006, the pandemic model progression of the disease once people have For example, we are now much more aware was developed to allow us to stress test been infected. It also includes factors such as of the potential economic impact from our portfolio as we do for large natural healthcare structures and demographic data. lockdowns and the accumulation potential catastrophes. This understanding has from business interruption. allowed us to steer key decisions around The output and usage risk appetite and our capital position. The model statistically analyses 50 000 These factors are being incorporated into Since its inception in 2006, the model different pandemic scenarios to see what the our model as part of its ongoing evolution. has received regulatory approval and is impact of a certain strength of a modelled This will allow us to better understand regularly audited. pandemic might be on a certain portfolio. the possible impact of future pandemics.

26 Swiss Re | Business Report 2020 Keeping ahead of future pandemics

Knowledge-transfer This Risk Resilience Center is the world’s richest COVID-19 data platform. It integrates partnerships such as The publicly available global data from more Having access to this wealth Trinity Challenge enable than 100 sources. of data and analytics creates us to be better prepared The Trinity Challenge participants thereby a tremendous opportunity for for the next pandemic. have the tools to analyse pandemics and academics, researchers and prepare possible responses to mitigate their impact. analysts. It provides the basis In October 2020, Swiss Re became part of for new modelling, ground- The Trinity Challenge, a global coalition that By contributing to The Trinity Challenge, we aims to better predict and prevent disease are joining a coalition of leaders across the breaking analyses and outbreaks by harnessing the power of data academic, non-profit and private sectors, actionable solutions. and analytics. including Google, Microsoft, McKinsey & Company, the Bill & Melinda Gates Swiss Reʼs participation is based around Foundation, the University of Cambridge Dame Sally Davies the Risk Resilience Center, developed in and Imperial College London. Master of Trinity College Cambridge partnership with leading big data analytics company Palantir Technologies.

Research that drives value for our clients

Christoph Nabholz, Chief Q. How has Swiss Re Q. How has client demand Q. How will we approach Research Officer at Swiss Re approached learning for our research been? pandemic risk in the Institute, was one of the experts about COVID-19? A. Demand has been strong. future? engaged in helping our clients A. We knew, in general terms, Since our business is based A. Clearly, we cannot stop learn about the COVID-19 that a pandemic would cause on understanding our clients’ learning. We know that a pandemic and ensuring our economic fallout, but the scale needs, much of our team’s global pandemic is a one-in- research kept us abreast of the global containment energy has been spent 30-year event, so clearly of developments. measures due to COVID-19 on gauging the right kind of ongoing research, monitoring was unprecedented and expertise and information and preparation are essential. therefore we needed to needed by different clients It is also vital that we accelerate our research. at different times. incorporate the learnings – such as the economic impact Swiss Re Institute took early Reaching out and talking to of lockdowns – into our steps to make sure we had our clients through digital financial models and the data and resources to channels helped us to underwriting tools. We need report on the true scale of maintain a continuous to look at technical issues the pandemic in a highly dialogue despite the social such as contract wordings. connected world. We took distancing restrictions. In fact, We also have to continue to steps to secure access to in Asia alone, we connected develop the best possible risk reliable data on critical areas, with over 9 000 clients management solutions to such as the virus’s lethality, through our webinars. ensure the impact of a future and the impact on both pandemic is minimal and our business and that of to partner with our clients. our clients. Only then can we be sure our Christoph Nabholz underlying business is more Chief Research Officer, resilient to future pandemics. Swiss Re Institute

How can we build resilience in the wake of COVID-19? Swiss Re | Business Report 2020 27 28 Transforming Tomorrow Together Tomorrow Transforming Re Swiss |

Business Report 2020 Report Business Tomorrow Technology and As an example, our advanced How can we use flood modelling is based on data help us to innovative technologies and data underwrite new that enable us to underwrite digital solutions risks. Thanks to the new risks. fast-paced digital We plug protection gaps by to make making insurance products more revolution, we can accessible and affordable. This create and manage means we can address issues insurance more such as the fact that only one increasing amounts in six Americans is protected of data and improve against flood despite the accessible? our risk insights. increased risk. In this section, we look at Swiss Re’s cyber solutions, satellite-powered parametric insurance schemes and flood modelling.

How can we use digital solutions to make insurance more accessible? Swiss Re | Business Report 2020 29 28 Transforming Tomorrow Together Tomorrow Transforming Re Swiss |

Business Report 2020 Report Business Tomorrow insurance safety net. more people within the industry, we bring millions technology and data in our acceleratingBy the use of Officer Operating Chief Group Bronder Anette and society face. society and industry our that challenges the to address of tools set unique of this use make full We must economies. emerging for covers catastrophe to natural space health the from landscape, risk the across are emerging Tech solutions platforms. digital through pools risk to attractive access gain and space insurance primary the in to risk closer get will we Lastly, competitiveness. their to improve clients our for same the do we that, we’ve done once and – efficiency drive and it to simplify chain, value own our toaim improve we Then advantage. acompetitive to build us enables which data, of our use make better will we first, areas: focus four has strategy tech Our clients. of our that and business our both transform truly to scale and flexibility the us give which partnerships, strategic and developments in-house of acombination is journey digital of our core the At approach A multi-faceted

How can we use digital solutions to make insurance more accessible? Swiss Re | Business Report 2020 29 Transforming Tomorrow Together

Unique depth of data Specific locations face a variety of risks – ranging from windstorms, floods and wildfires through to earthquakes. Swiss Reʼs risk tools also extend to important new risks, such as declining biodiversity High-quality data or climate change. Risk assessment for natural catastrophes in new markets is challenging. Swiss Reʼs CatNet helps bridge the knowledge gap, supporting quality underwriting in new and established markets.

Data-driven growth across the globe

Key Likelihood of a flood event: From the massive US property market through Low High to smaller emerging economies, millions of people 1 in 500 years 1 in 20 years are benefitting from improved technology tools to make their homes and businesses insurable. Data for disciplined underwriting When extending coverage to millions of previously uninsured Expanding the US flood market people, a scientific and data-driven Each year, floods across the United States approach to new frontiers gives cause approximately USD 15 billion in more certainty regarding the damage. Despite that, just one in six US underlying insurance risk. In this way, insurers can reach into new homes has flood insurance. Finding a way markets without being blind to the to increase this uptake, in partnership with potential liabilities. our insurance clients, will therefore have a big impact on the resilience of businesses and households across the country. 1 1 0 0 66 The issue around flood insurance was clients using parametric deals sourcing the relevant granular data to CatNet® since 2017 accurately model the risk. Thankfully, recent advances in technology are helping us to address this challenge. Swiss Re’s inland flood model, developed by our Catastrophe Perils team, is high-resolution and fully

30 Swiss Re | Business Report 2020 Emerging markets

Satellite-based protection in Vietnam Development and Cooperation, the By design, the state is divided into multiple In 2020, Swiss Re partnered with the Deutsche Gesellschaft für Internationale regions and a stepped payout feature Vietnam National Reinsurer (VINARE) to Zusammenarbeit (German Corporation for allocates funds to regions where losses develop the first index-based rice insurance International Cooperation) and Swiss Re. occur and in proportion to the amount of product adopted within a public scheme recorded rainfall. by the Association of Southeast Asian Satellite technologies are proving Nations (ASEAN). increasingly useful for public-private Further expansion in insurance partnerships. This is especially The African Risk Capacityʼs Tropical The cover draws on satellite technologies to so for the agricultural sector, where the Cyclone cover was another important measure rice production and damage to costs of assessing losses are a barrier to sovereign programme supported by fields and then uses an index-based trigger affordable coverage. Swiss Re in 2020. to enable swift payouts through a simplified claims process. Rainfall cover in India This work builds on Swiss Reʼs track In 2020, we created a new parametric record of developing innovative solutions The technology providing the technical data insurance structure that covers the Indian for the African continent. We have is enabled by RIICE (Remote Sensing-based state of Nagaland for excess rainfall that provided parametric and satellite-based Information and Insurance for Crops in can lead to severe flooding. insurance to support the agricultural Emerging Economies). This scheme was sector there, as well as forming digital created through a public-private partnership The coverage is based on a geospatial partnerships to create commercial between the satellite data processing dataset where rainfall intensity is derived cyber products and telematic solutions company sarmap, the International Rice from satellite observation and rain gauges. for motor insurance. Research Institute, the Swiss Agency for

There is a strong willingness to close the flood protection gap in the US. We can only do this if we deploy smart digital solutions that help insurers understand risks.

Matt Junge Head of Property Solutions US & Canada probabilistic. It combines detailed hazard can now create their own flood products, % information and insurance conditions to develop ratings and underwriting 300 support underwriting for flood insurance. guidelines and are even supported in growth in the number of supported their regulatory filings. flood programmes 2018–2020 This fully digital solution is easily integrated into our clients’ underwriting processes. Digital solutions such as Swiss Re’s global The comprehensive dataset and visualisation inland flood and storm surge zones are USD bn tools allow clients to model various risks, helping the US private flood insurance 38 such as river flood, heavy rainfall and storm market move out of its infancy. With potential flood insurance surge, at any location across the globe. an estimated USD 38 billion in potential market premiums in the US premiums, there is a strong incentive This solution is fuelling growth in the market. for insurers to tackle a risk once From 2018 to 2020, we saw a 300% deemed “uninsurable”. increase in the number of flood programmes that we are supporting. The digital capabilities that have since evolved provide a true end-to-end solution for clients. They

How can we use digital solutions to make insurance more accessible? Swiss Re | Business Report 2020 31 Transforming Tomorrow Together

Data-driven risk knowledge platforms open up opportunities to apply our risk insights beyond today’s insurance and financial risk transfer mechanisms.

Pravina Ladva Group Digital Transformation Officer

Developing a digital sixth sense

Our partnership with enabling industries to foster stronger societal resilience. Ultimately, it acts as a digital sixth Microsoft puts Swiss Re at sense that helps us to understand the ripple the forefront of big data effects of risks on society, governments capabilities in the insurance and economies. industry. It provides us with For example, the Center’s capabilities enable risk managers to get a data-driven data tools that open up new understanding of how the loss of a ship’s ways of doing business. cargo or unexpected breakdown may impact entire global supply chains. City planners and developers can also model how natural In March 2020, we announced our catastrophes will affect a government’s partnership with Microsoft to create a Digital key infrastructure investments – and create Market Center. The Center draws on real-time responses in preparation. cutting-edge capabilities across Microsoft’s next-generation Azure cloud technologies, Based on these types of data insights, internet of things and artificial intelligence. insurers can develop solutions that proactively mitigate losses before they occur. This partnership goes beyond insurance. It will enable the development of The first areas of application are planned to next-generation, large-scale tools that will be cyber risk, supply chain management, transform the way the insurance industry natural catastrophe resilience and connected predicts and manages risks. The Center will vehicles and mobility. also create innovative platforms to measure business risks in a digital environment,

32 Swiss Re | Business Report 2020 A safety net for cyber risk

Our evolving global digital 2020, which is modest compared with more Affordable private cyber insurance established insurance lines. In August 2020, Swiss Reʼs iptiQ and a services are critical for leading Dutch financial comparison platform, individuals, communities and Easy and customised solutions Independer, announced the launch of a To support clients in offering solutions to first-of-its-kind cyber insurance proposition businesses today – and will counter this growing risk, Swiss Reʼs Cyber & for private individuals in the Netherlands. become ever more so. Digital Solutions team has developed a The product provides protection against the comprehensive and customisable cyber most common cyber risks from just EUR 4.10 insurance product development toolkit for per month for individuals and families. Digital communication was the key enabler insurers wishing to develop their own cyber of business continuity and connectivity insurance offering. The toolkit includes Cyber combined with home insurance during the COVID-19 lockdowns. support on policy wording, risk assessment In 2020, Swiss Re and Alte Leipziger However, it has also exposed businesses and costing. In order to grow the cyber developed and launched a private cyber and individuals to increased cyber risks, insurance portfolio sustainably, the Cyber module as part of their home contents meaning people need to take steps Product Suite also comes with reinsurance insurance. This gives consumers the to better protect themselves and capacity included in the package. opportunity to buy comprehensive their businesses. protection against cyber risks at a relatively The Cyber Product Suite is tailored for small low price. The produce even includes Cybercrime now results in losses of and medium-sized companies that require professional support for young people almost USD 1 trillion a year, according to a end-to-end cyber solutions to protect their against cyberbullying. recent study by security software company business, as well as for individuals seeking McAfee. Cyber insurance market premiums, to protect themselves against this emerging however, stood at only USD 5.5 billion in risk class.

USD 5.5 bn cyber insurance market premiums in 2020 USD1tn estimated annual cost of cyber attacks to global economy

How can we use digital solutions to make insurance more accessible? Swiss Re | Business Report 2020 33 34 Transforming Tomorrow Together Tomorrow Transforming Re Swiss |

Business Report 2020 Report Business Tomorrow The transition In 2015, Swiss Re signed the How can we Paris Pledge for Action, an to a low-carbon initiative that aims to strengthen economy is essential the global response to the threat work together in order to mitigate of climate change. the effects of Since then, we have taken towards net zero? decisive actions to align our climate change. investments, underwriting and operations with our commitment to cutting carbon emissions.

We are also developing solutions that help others transition to a low-carbon world, for example by backing insurance products that de-risk new wind and solar energy projects.

In this section, we look at what it means to work towards a net-zero future.

How can we work together towards net zero? Swiss Re | Business Report 2020 35 34 Transforming Tomorrow Together Tomorrow Transforming Re Swiss |

Business Report 2020 Report Business Tomorrow of WEF’s Alliance of CEO Climate Leaders Climate CEO of Alliance WEF’s of Co-Chair and Officer Executive Chief Group Mumenthaler Christian to reducing CO support others as they commit our impact. we And will We are taking action to reduce A net-zero future is achievable. more sustainable future. future. sustainable more a build partners our to help investments our and knowledge our use will we change, the lead we As into action. knowledge to turn come has time the that signal astrong send to anet-zero They future. road along on steps next the are only actions These removal. carbon into high-quality investment our strengthen us help and business our conduct we as making decision- green incentivise will which operations, our across levy carbon atriple-digit We announced 2023. by gas and oil carbon-intensive 10% most world’s the for management asset and underwriting in support business to cut Wejourney. committed our on steps important 2020, several In took we change. the to lead action We are taking change. climate combatting therefore and emissions carbon reducing in role ahuge plays sector private the that We believe zero net for strive to now is time The 2 emissions

.

How can we work together towards net zero? Swiss Re | Business Report 2020 35 Transforming Tomorrow Together

Our commitment to reach net-zero emissions

Swiss Re is supporting Decarbonising our business model Timeline for net-zero emissions global efforts to limit We have made three interlinked commitments to strive for net-zero By greenhouse gas emissions across the whole company: 2030 emissions. Our public in our own operations • For our underwriting, we were an early commitments include signatory to the UN Global Compact signing the Paris Pledge Business Ambition for 1.5°C; By • For our investments, we are a founding 2050 for Action in 2015, which member of the UN-convened Net-Zero in our underwriting portfolio we have reinforced Asset Owner Alliance; • For our own operations, we created a through our own thought-leading CO2NetZero Programme. By company-wide targets 2050 This is only the beginning of our journey in our investment portfolio and actions. to decarbonise our business and we are already taking the next steps. These include developing risk transfer solutions to spur on the transition to a low-carbon economy, implementing our responsible investing strategy and actively reducing and removing our operational carbon footprint.

Getting to net zero: “Do our best, remove the rest”

To reach net zero, itʼs not Reduce Reduce and offset Reduce and remove enough to simply reduce emissions nor to offset emissions through carbon avoidance certificates. We need to do our best to reduce 2 tonnes of CO2 emissions and then remove 1 tonne 1 tonne emitted 1 tonne 1 tonne 1 tonne 1 tonne of CO2 of CO2 of CO2 of CO2 of CO2 of CO2 the rest from the atmosphere. emitted + emitted = emitted + avoided = emitted emitted = 0 We will balance any by us elsewhere by us elsewhere by us net-zero CO2 unavoidable emissions by 1 tonne focusing on carbon removal + of CO2 removed via our insurance and investment activities, as well as by compensating for our operational emissions.

36 Swiss Re | Business Report 2020 Putting net zero into action

We have set interim targets Decarbonising our underwriting and social infrastructure loans by Since 2018, our underwriters have restricted USD 750 million by the end of 2024. Further and implemented measures business related to thermal coal. From July details are available in the Climate-related to deliver on our net-zero 2023, we will no longer provide individual Financial Disclosures section of Swiss Re’s insurance cover for those oil and gas Financial Report 2020. ambition across our companies that are responsible for the underwriting, investments world’s 10% most carbon-intensive oil and Decarbonising our operations gas production. These restrictions are in In 2020, we sourced 100% of our power and operations. We are place for underwriting single risks, and this needs from renewable sources. In 2021, also looking to drive the approach is being extended to restrictions we will curb flight emissions by 30%, relative development of key across the more complex treaty business. to the 2018 level. technologies for the net-zero Decarbonising our investments On top of that, we have stepped up to a real In 2020, we set a 2025 carbon intensity internal carbon levy of USD 100 per tonne future. We provide a few reduction target of 35% for our corporate of CO2. The levy gives a good incentive to highlights here. bond and listed equity portfolio. As the further reduce our operational emissions transition of the real economy is essential to and provides the necessary funding to achieve a 1.5°C world, we have introduced compensate for our residual emissions via an aspirational Engagement Framework carbon removal. By 2030, the levy will that encourages our investee companies to increase to USD 200 per tonne of CO2, the develop a corresponding climate strategy. market price we expect for high-quality In addition, we have for the first time set a removal certificates at that point in time. target to increase investments in renewable

Emerging technologies that will help make net zero a reality

To reach net zero, itʼs Renewable energies Green buildings necessary to develop Wind and solar Improved heating and deploy key projects are the systems, appliances, technologies. Swiss Re leading renewable insulation and building plays a role in helping energy sources. materials are Insurance solutions adaptations that make to rapidly advance already exist for building more efficient. progress in this area. construction covers. Carbon removal We de-risk projects Lithium battery Natural methods such to make them storage as afforestation profitable, provide As an example of a removes carbon funding through new technology, dioxide from the our investments lithium ion batteries atmosphere. New and focus on carbon are essential to power high-tech carbon removal in our a low-carbon capture technologies economy. However, exist, but still require operational footprint they are also an significant investment. measures. This sends emerging risk – for a positive signal that example, the risk of fire stimulates demand when storing them. for new technologies, such as:

Swiss Re | Business Report 2020 37 Transforming Tomorrow Together

equivalent of Helping to accelerate ~65 000 Illinois homes powered renewable energy by project so far development in the US ~USD 55 m expected economic benefit to local communities over 20 years

Swiss Re is committed to In our mission to help make the world more supporter of sustainable business practices, resilient, we proudly teamed up with several both as an insurer and as a global corporate reaching net-zero carbon leading technology companies to collaborate citizen,” said Brian Beebe, Head of emissions by 2050 – this on a project that supports clean energy Origination North America, Weather and progress in the United States. Energy, Swiss Re Corporate Solutions. means we need to act “To our employees in those areas, we in a smart, sustainable Located in Illinois, the Green River Wind provide access to 100% impactful green Farm became operational in November power by entering a long-term contract way now. 2019 and has since generated an impressive with the Green River Wind Farm.” 591 910 MWh – which is the equivalent electrical usage of approximately 65 000 As an operating project, Green River has Illinois homes. According to the United begun to provide positive long-term States Environmental Protection Agency’s economic impacts to the local and state Greenhouse Gas Equivalencies Calculator, communities. The project is estimated to Green River has already offset CO2 emissions contribute approximately USD 35 million by approximately 418 000 metric tonnes. in new tax revenue and USD 20 million in landowner payments throughout the first This collaboration brings Swiss Re closer 20 years of operations. to its ambition of net-zero carbon emissions by 2050. “Swiss Re has long been an avid

38 Swiss Re | Business Report 2020 Investing in a brighter future

In the global quest to reduce CO2 emissions and eventually reach net zero, investment in clean energy plays a key role. Yet, as with any new and emerging segment, investors need to be convinced that it is worth investing in. Insurance has an important role to play in de-risking the investment.

In September 2020, Swiss Re Corporate Solutions USD m and its data partner, kWh Analytics, successfully 300 developed a ten-year Solar Revenue Put for secured financing an investor in large, utility-scale solar projects. The client was familiar with this Business Unit’s power-generation expertise and its claims Revenue Put guarantees experience from previous insurance transactions. ~95% The Solar Revenue Put is an insurance product of expected solar output that guarantees up to 95% of a solar farm’s expected output, helping to mitigate a central risk of generating solar power – lack of sunshine. The client pays a premium for the product and, if the plant does not generate enough power, Swiss Re covers the lost revenue.

The product helped the client to refinance their portfolio of projects in Utah. By driving down the investment risk, the client successfully issued around USD 300 million in senior-secured private placement debt.

This was a landmark deal on two counts. Firstly, a leading renewable project ratings agency gave the solar project an investment grade rating of BBB–, citing the Swiss Re Solar Revenue Put Swiss Re has long been an as a contributing factor. This opens the door to additional solar deals for Swiss Re. Secondly, avid supporter of sustainable it was the first time that this product was used business practices, both in the financing or refinancing of solar projects within the US private-placement debt market. as an insurer and as a global corporate citizen.

Brian Beebe Head of Origination North America, Weather and Energy, Swiss Re Corporate Solutions

How can we work together towards net-zero? Swiss Re | Business Report 2020 39 40 Transforming Tomorrow Together Tomorrow Transforming Re Swiss |

Business Report 2020 Report Business Together Partnerships give us The most successful journeys How can are the ones that we take the means to assess together with our partners: the risk landscape, clients, companies, academic partnerships explore the future institutions and sovereigns. of risk coverage We work on innovative new help us close solutions that close protection and drive forward gaps in all lines of business industry change. across the industry. For instance, protection gaps? we have partnered with key players from the automotive industry to make motor insurance more affordable and accessible for customers.

In this section, we look at how our partnerships help us to tackle the big industry challenges and find solutions that enable societies to become more resilient together.

How can partnerships help us close protection gaps? Swiss Re | Business Report 2020 41 40 Transforming Tomorrow Together Tomorrow Transforming Re Swiss |

Business Report 2020 Report Business Together Chief Executive Officer Reinsurance Officer Executive Chief Moses Ojeisekhoba and co-create new solutions. we build new relationships Working with our partners, when you move together. You can only move forward gaps. protection close and of insurance boundaries the push industry, the across models business new unlock way, this In collectively we their customers. to solutions insurance possible best the provide to confidently partners our allowing products, new to develop us enables This technologies. of new incorporation the around centre partnerships these of Many companies. to software manufacturers car and retailers –from of businesses range wider a with Today, partnerships building are we also UK. the in partners long-term strongest of our one with undertaken 2020 in was management diabetes on work ground-breaking our that example, for coincidence, no is It collaborations. ongoing are to linked these today innovations of our several that We are proud generations. over endured have of which –many partnerships around centred been has Re Swiss inception, its since Ever perspectives new partners, New

How can partnerships help us close protection gaps? Swiss Re | Business Report 2020 41 Transforming Tomorrow Together

Partnering to transform automotive insurance

As automotive technology On the road to successful risk scoring calculate insurance premiums for BMW Vehicles equipped with Advanced Driver vehicles while taking the safety of driver advances, so too must motor Assistance Systems (ADAS) help drivers to assistance systems into account. In insurance. This requires more easily avoid accidents. This should lead September 2020, we also partnered with to more accurate insurance premiums for Toyota Insurance Services to make this effective collaboration and car owners. However, until recently, insurers solution available for Toyota and Lexus innovation, which is exactly had no way of knowing which vehicles vehicles across Europe from 2021. were equipped with which safety features. how we developed the Swiss Re intends to integrate other major ADAS Risk Score. To address this issue, in 2019 Swiss Re and car brands into the ADAS platform, creating BMW Group launched the ADAS Risk Score, an industry standard for motor insurance. a vehicle-specific insurance rating. With this score, primary insurers worldwide can

Original equipment Swiss Re manufacturers (OEMs)

Vehicle data Testing and Granular safety simulations features For enhanced (ADAS) data vehicle safety scoring

Performance Risk assessment assessment know-how Engineering insights Enables car safety on enhanced to be factored into safety features insurance premiums

Communication Engineering Introduction of feedback to OEMs new vehicles and Based on performance safety features Risk insights to enhance to markets Score car safety

Benefits include:

OEMs Clients End customer and society Manufacturers have more Insurers enjoy Car owners benefit from a leverage to sell ADAS- healthier and better reduced cost of ownership equipped vehicles. performing portfolios. and safer vehicles.

42 Swiss Re | Business Report 2020 Swiss Re and Daimler Q. What was the idea behind Q. What do you find most creating Movinx? impressive about this launch online motor A. Sebastiaan Bongers: With the partnership? insurance company rise of e-mobility, automated A. Andreas Roth: The openness driving and more flexible car and close collaboration is what In October 2020, Swiss Re and Daimler usage, the automotive sector really impressed me. We have Insurance Services jointly launched a is undergoing a significant a strong joint vision to transform new insurance company, Movinx, transformation. Our aim is to motor insurance. to cater to the changing needs of car create a new international manufacturers and customers. The aim insurance intermediary where Q. What has been most is to enable Mercedes-Benz customers product development, pricing, challenging so far? to conveniently purchase and manage marketing and servicing A. Andreas Roth: Due to COVID-19, motor insurance products online that are are closely aligned with the Daimler and Swiss Re had a specifically tailored to their automobile changing needs of car long-distance relationship. model and usage type. For instance, the manufacturers and customers. So, we had to be organised products are being developed based on about exchanging information characteristics such as a vehicleʼs safety Q. How was the partnership and ideas. features or whether an automobile will formed? A. Sebastiaan Bongers: The other be owned or shared. A. Andreas Roth: Daimler was challenge was building a looking for a solid partner scalable global proposition right to create a new insurance set-up. from the beginning. Its vision requires launching innovative insurance products Q. What makes Movinx unique? across the globe – at high pace A. Andreas Roth: We are not just and frequency. To make that another white-label programme. easier, we created Movinx in Movinx is unique because it partnership with Swiss Re, involves a strategic alliance so that Daimler only has to between Daimler and Swiss Re discuss its needs and ideas with that is purely dedicated to the one partner (Movinx). We jointly new automotive and mobility era develop the customer journey of connected, autonomous, and Movinx takes care of the shared and electric vehicles. The insurance components such as Movinx strategy is to eventually the product development. expand in order to form a closer Sebastiaan Bongers and stronger cooperation Managing Director, Chief Product Officer, Movinx between the wider insurance and automotive industry.

We have a strong joint vision to transform motor insurance.

Andreas Roth MD, CFO, Movinx

Andreas Roth Managing Director, Chief Financial Officer, Movinx

How can partnerships help us close protection gaps? Swiss Re | Business Report 2020 43 Transforming Tomorrow Together

Supporting healthier clients

Type 2 diabetes is one of the major global health concerns. However, it can be managed and prevented. Gro Health is an innovative app with a successful track record for improving health and putting diabetes into remission. In 2020, we piloted Gro Health with ’s employees.

The incidence of type 2 diabetes is Adapting to COVID-19 growing in the UK, with the number of COVID-19 caused only minimal disruption Gro Health was introduced to people suffering from the condition set to the pilot. Gro Health even introduced to grow to 4.5 million by 2025. lockdown-specific content such as indoor Aviva by Swiss Re as an workouts and mindfulness exercises, innovative solution to bolster Gro Health is an app that helps people which had a positive effect on uptake. change their behaviour regarding nutrition, engagement and improve the fitness, sleep and mental wellbeing. The Opportunity for growth health of Aviva employees. user-friendly platform includes coaching, In addition to supporting Aviva’s exercises and diet plans, among many employees, the pilot has given us insights other features. into how we can develop other diabetes Nina Brown solutions. Growth opportunities are not Wellbeing Lead, Aviva Building on a long-term partnership limited to the UK. We are already seeing We piloted Gro Healthʼs Low Carb opportunities to offer this solution in Programme with Aviva employees via several key global markets and also within their MyAviva wellness app. During the different client segments. scheme, the employees followed Gro Health’s diet and exercise plans and then Benefits for the industry provided feedback on their experiences. With one in 11 adults globally suffering from diabetes, rolling out more More than 260 employees joined the pilot programmes such as this will likely benefit and the results were very positive. For insurers by reducing the frequency and instance, weight reduction was recorded cost of claims – and, even more by over a quarter of the participants. The importantly, help improve the lives of app also received a very high satisfaction millions of people around the globe. rating from its users.

44 Swiss Re | Business Report 2020 Partnerships that get us to scale

Our partners provide Health insurance for China’s children Granular Insurance and new health care In 2019, Swiss Re entered into a strategic Verily is a subsidiary of Alphabet that focuses the technology and partnership with JD Technology Group, on making health data useful so that people consumer outreach a business group under the Chinese can enjoy healthier lives. Its tools and devices company JD.com. collect, organise and activate health data, to bring large numbers and enable appropriate measures to prevent of people within the The partnership focuses on providing and manage disease. industrial enterprises, financial institutions insurance safety net. and governments with technological Swiss Re Corporate Solutions and Verily Here are two examples. products and solutions, including the have partnered to form Granular Insurance. application of insurtech in the area of life The companyʼs first solution to enter the and health insurance. market will help self-funded employers to manage their healthcare costs through an In 2020, the partnership led to the launch innovative stop-loss product. This product of a simplified health product. Based on reimburses employers for claims above a a co-created risk selection process, the defined amount and therefore allows them to product covers 15 critical diseases for protect themselves from unexpected and children from birth to 17 years of age. large employee health benefit claims.

iptiQ: Growing into P&C

Originally launched as a white-label Q. Why is iptiQ important for Swiss Re Q. What is the value of iptiQ for insurance platform for new life and health and our industry? our partners? distributors, iptiQ significantly grew its A. iptiQ’s end-to-end technology gives new A. Simplicity. iptiQ makes insurance easy for new property and casualty business in partners everything they need to enter companies, who in turn make it easier for 2020. Andreas Schertzinger led this work into insurance. It is also useful for insurers their customers. We offer a technological in EMEA, building new partnerships to extend their reach into new products platform from which to underwrite and across Europe. and distribution channels. administer business and manage claims. We also provide services such as iptiQ is set to become a growth engine behavioural economics to design a great for Swiss Re. In 2020, we reached customer journey. USD 371 million in premiums, with an 83% annual growth rate since 2017. Given our global footprint, we help Our market-implied valuation is distributors with local issues, such as USD 2 billion, making it a very specific product requirements or exciting business. accessing local insurance partners to support them. Q. iptiQ began in L&H. How is its P&C growth developing? A. iptiQ P&C onboarded six new distribution partners across Europe in 2020, offering a variety of products from cyber to motor iptiQ makes insurance to home insurance. It’s early days, but easy for companies judging by the calibre of our partners, we’re on the right track. and their customers. Andreas Schertzinger CEO, iptiQ P&C EMEA

How can partnerships help us close protection gaps? Swiss Re | Business Report 2020 45 Our people and culture

Our people and culture

Swiss Re’s workforce rose to the challenge in 2020, remaining OurOur people split by region Our international team focused on clients and partners. 81 office locations in 29 countries In the extraordinary year that was 2020, we (2019: 80 office locations increased our efforts to service our clients. in 31 countries) We did so by ensuring that our business continued to run without disruption during lockdown. We also increased our focus on employee wellbeing as our people dealt 1 3 1 8 9 26%24% AmericasAmericas with the added challenges of juggling employees 54%61% EMEAEMEA working from home, lockdowns, family life (2019: 15 401) 20%11% Asia-PacificAsia-Pacific and day-to-day business.

It was a year in which diversity was a major social theme and we responded to this 1 2 1 challenge with initiatives that increased nationalities inclusivity across our global workforce. (2019: 115)

To learn more about our people initiatives and performance in 2020, please see our Sustainability Report at https://reports. swissre.com/sustainability-report/2020

Inclusion and diversity

At Swiss Re, we are aware of the value that Mosaic was established in the US and Inclusion & Diversity (I&D) brings to our Mexico in 2019. By the end of 2020, it had company. We work hard to ensure that expanded beyond the Americas, with every employee feels that they belong and local branches established in South Africa, are able to contribute and thrive. and the UK.

As our own understanding of what Alongside Mosaic, we have several active constitutes an inclusive organisation employee resource groups focusing on evolves, so too does our approach to I&D. In inclusion through the lens of topics such as 2020, triggered by the Black Lives Matter gender diversity, LGBTI+ and mental health. movement, we increased our employee engagement on issues of race and ethnicity. These groups build awareness about I&D topics across the organisation and One example is the expansion of “Mosaic”, represent the voice of our employees an employee resource group that promotes by providing feedback, sharing ideas and an inclusive and productive environment. co-creating impactful I&D solutions. The group aims to enhance the professional and personal development of people of colour and ethnic minority groups.

46 Swiss Re | Business Report 2020 Building employee resilience

Our vision to make the world more resilient can only be achieved if our employees themselves are resilient. This became all the more apparent during the COVID-19 pandemic, when we had to change our normal working patterns to accommodate working from home, home schooling and dealing with new emotions and worries – all while maintaining a seamless business flow. In recognition of our employees’ extra Wellbeing, not just performance Further action beyond 2020 efforts in 2020, we introduced a special Health and safety was a focus area for us We are committed to continuing on this Swiss ReSilience Day on 15 January 2021, in 2020. We know that prolonged working path and further developing our employee where each of our employees was given the from home comes with its challenges for support initiatives. day off to rest and recharge their batteries. both physical and mental health. Pathways, Swiss Re’s mental health The benefit of an established culture Throughout 2020, we ran surveys with network, allows employees in all locations Swiss Re’s flexible ‘Own The Way You Work’ our workforce to feel the pulse on their to raise their hands and become Mental culture paid dividends as the COVID-19 wellbeing. We learned that a large majority Health Champions. By the end of 2020, we lockdowns were rolled out across the globe. of employees feel Swiss Re responded had over 200 Champions offering support On the technical side, our well-established strongly to the COVID-19 crisis and took such as mental health talks, mindfulness IT infrastructure enabled teams to operate timely decisions showing care and support. sessions and desk yoga. remotely from home without any disruption. We were therefore grateful that we In Zurich, our mental health survey in The Champions raise awareness of mental could draw on our established culture November 2020 showed that 72% of all health issues among employees, challenge of flexibility. employees felt Swiss Re had increased mental health stigma and provide peer awareness for mental health issues. Also, support to colleagues. They lend an ear to The result was uninterrupted service for our 88% of people said that they would anyone in need of support, including those clients – in fact, our Asian Treaty team even approach a colleague who they believed who are experiencing mental health issues increased the number of renewed contracts was mentally unwell to check on their or emotional distress. They also spread the it processed versus 2019. wellbeing. word about the wellbeing support available.

Enabling people to succeed

Q. Why is developing our people Q. What are the priorities for 2021 so important? and beyond? A. As a risk knowledge company, we need A. Our overall mission remains to shape to enable continuous learning and the culture of the company for business development for our people to ensure we impact. Within this, one clear priority jointly shape the success of our company for 2021 and beyond is to push our today and in the future. We want a Inclusion & Diversity agenda to the next culture where working for Swiss Re leads level. We want to build on the strong to fulfillment for our people and where foundation Swiss Re has and create an they are able to continuously grow and even more inclusive work environment, realise their full potential. enabling everyone to be at their best and succeed.

Monika Waber Head Organisation & People Development Our passion is to drive the development of our people and our culture to create impact for our business.

Section Swiss Re | Business Report 2020 47 Our people and culture A discussion with Walter B. Kielholz

Delivering long-term returns in an ever-changing environment

After over 30 years at Swiss Re, including 12 years as Q. Mr. Kielholz, you became an Executive Board member of Swiss Re in 1993, then the CEO Chairman of the Board of Directors, Walter B. Kielholz from 1997 until 2002, when you took on the will retire in 2021. He discusses how Swiss Re has Chairman role at , and then you returned to Swiss Re as the Chairman in been able to maintain its superior capitalisation, grow 2009. How has the company developed over in a volatile risk landscape and deliver a strong long- the past three decades? A. Swiss Re has gone through many ups and downs. term return for shareholders. We had phases of divestures and acquisitions, years of very low claims and periods of large losses. Through all these phases, we were guided by our capital management priorities. Our long-term shareholders will be very well familiar with them. The first priority has always been to ensure superior capitalisation at all times. The second priority is to grow the regular dividend with long-term earnings. The third is to deploy capital for business growth, and the fourth is to repatriate excess capital to shareholders.

Q. Can you give us an example of how this emphasis on superior capitalisation guided the management’s decision? A. In the early 1990s, we were one of the largest direct insurance groups in Europe, with big businesses in Germany, Italy, Spain and the UK. When the asbestos crisis swept over the industry, to be able to increase our reserves and preserve strong capitalisation, we decided to sell these direct insurers and concentrate more exclusively on reinsurance, where the outlook was judged to be more favourable. As a consequence of this decision, our share price increased 500%. We became a much smaller company, much more focused, and also much more valuable.

Q. Has the notion of what constitutes superior capitalisation evolved over the past three decades? A. To put it very simply, as a CEO and then a Board Member, I always wanted to sleep well at night. And to sleep well, we needed the strong capital base. Of course, there was nothing like the Swiss Solvency Test 30 years ago. Back then, the Swiss insurance regulator actually considered not regulating reinsurance companies. So, the way capitalisation is measured has definitely changed over the years, but our desire to be Walter B. Kielholz addresses guests during Swiss Re’s 150-year anniversary event strongly capitalised was always the same, in London in 2013. Over the course of the year, more than 30 000 guests across the globe joined Swiss Re to celebrate this major milestone in the company’s history. irrespective of regulation. At the end of the day, this gives us a strategic advantage – our clients want to work with a reinsurer whose capital strength is beyond any doubt.

48 Swiss Re | Business Report 2020 Q. Since that divesture of the direct Q. And what investments is Swiss Re which constantly repatriates capital to insurance companies in the 1990s, focusing on now? shareholders, you have to look at the total Swiss Re has grown significantly. A. Now we’re reinvesting the money from return that investors get. Our long-term How was this achieved? the sale of ReAssure into the growth of shareholders received a total return of A. That divesture later allowed us to acquire our white-label digital insurance platform 8% per annum since 1993. This is not 3.1 3.1 a whole range3.0 of national reinsurance iptiQ, where we see2.9 great opportunities something to be taken for granted. As a companies in Europe and America,2.8 0.4 for the future. We also see attractive CHFcomparison, 171 the MSCI World Index – 2.7 2.6 2.6 establishing Swiss Re as a truly global opportunities to invest our capital in the which includes the largest companies reinsurer. In the 1990s we also made 1.6 P&C Re business, now1.3 that we are finally across 23 developed countries and has 1.1 0.9 the strategic decision to grow1.5 our Life 1.1 in a hardening1.1 market after so many2.0 years1.9 been propelled higher and higher in 0.2 and Health2.7 businesses to complement of inadequate prices. recent years by the growth in technology the already-strong Property & Casualty CHFstocks 84 like Apple, Microsoft, Amazon or 1.1 franchise and provide1.0 additional Q. Growing the dividend and repatriating Google – returned 7% per year over the 1.8 1.9 CHFdiversification 50 benefits to the Group. We1.5 1.5 excess1.6 capital1.6 to1.6 shareholders1.7 are the same period. The MSCI World Insurance 1.3 pursued this growth1.0 through1.1 acquisitions other two capital management Index returned 5% per year since it was of Mercantile & General Re Group in 1996, priorities you mentioned. Can you first established in 1995. 0.0 0.3 Life Re in 1998 and Lincoln Re in 2001, elaborate on the developments over 2 and2009 today2010 we are2011 the market2012 2013leader 2014in 2015the2016 past three2017 decades?2018 2019 2020 2021 Q. Why do you think Swiss Re has Life and Health Reinsurance. Finally, A. With the exception of extraordinary loss managed to outperform? after establishing the Admin Re business events, such as the terrorist attack on A. Our company has a very resilient business in 1998, which focused on efficient 11 September 2001 or the losses in the model. We are in a volatile business, administration of closed and legacy global financial crisis, we continuously which can be challenging at times. We books of life insurance, we made many grew the ordinary dividend we pay to act as a shock absorber, and this means acquisitions in this space until we shareholders. This was also that every few years we will encounter 5 decided to sell this business. complemented by special dividend circumstances that lead to large claims. payments and share buybacks to return WeCH Fhave 241 supported our clients through Q. The4 Admin Re business you are excess capital. Since 1993, Swiss Re many crises, and we are doing the same referring to had grown into ReAssure, repatriated nearly USD 38 billion to our with the COVID-19 pandemic. I have which3 Swiss Re sold in 2020. What shareholders through these measures. always attributed the success of Swiss Re was the reason for the sale? For 2020, even though the COVID-19 to three factors: the heart, the brain and

A. We2 decided to sell ReAssure because of crisis has led us to report an annual loss, the wallet. The heart stands for our strong the high capital requirements for this the Board of Directors is proposing an relationships with clients, the brain CHF 82 business under the Swiss solvency rules unchanged dividend of CHF 5.90 per represents the tremendous amount of risk 1 and because we were not prepared to share, underlining our capital strength knowledge we possess, and the wallet CHFtake 26 as much risk on the asset side as and confidence in the future of Swiss Re. is our capital strength. All three of these was0 necessary for achieving target success factors are as strong as ever, returns.1993 In199 our5 business1997 199 of 9taking2001 risks,2003 2005Q. And2007 how2009 has2011 Swiss2013 Re’s share2015 2017price 2019 which also makes me very optimistic for you can’t always grow and grow and developed over this time? the company’s future. take more and more risk. We must A. When looking at the share price be selective. development for a company like Swiss Re,

Swiss Re total shareholder return + % p.a. Two distinct phases: Growth until 2009 and disciplined capital repatriation to shareholders after 2009 8 return in CHF CHF bn COVID-19 300 since 19932 Asian and Russian financial crisis 5 Dotcom bubble Increased natural catastrophe frequency; starts 250 European storms Lothar/Martin insurance soft market starts Global financial CHF 241 4 WTC Sept 11 crisis 200 Cumulative Burst of dotcom Redemption of 2 3 bubble and stock convertible bond dividends market collapse 150 Hurricane Andrew (Storm frequency Ordinary dividend1 2 explodes after 100 30 years) Special dividend1 CHF 82 Share buyback1 2 1 50 Share price CHF 26 Total return index2 0 0 Share price2 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

1 Paid amount in respective year. 2 Over the period 4 Jan 1993 – 5 Feb 2021, assuming full reinvestment of the dividends.

A discussion with Walter B. Kielholz Swiss Re | Business Report 2020 49

Walter B. Kielholz: Timeline

Over 30 years of innovation at Swiss Re

Under Walter B. Kielholz’s stewardship, Swiss Re has met a rapidly changing world with a spirit of innovation and a determination to grow. 1997 2002

1992 1995 1997 2002 Responsible for  Leadership of the CEO of Swiss Re In 2002, Mr Kielholz stepped reinsurance in Alternative Risk down as Swiss Re’s CEO. From US and the UK Transfer Unit 2003, he served as Chairman of the Board of Directors of Credit Suisse Group AG. Mr Kielholz continued to serve 1989 1993 as Vice President of Swiss Re’s Head of Japan Member of the Board of Directors. and Far East Swiss Re Executive Board Kyoto Protocol Euro 9/11 Dotcom bubble begins introduced 1989 1995 2000

Exxon Valdez US oil spill Hurricane Andrew European Fall of the Berlin Wall cyclone Lothar

1996 1997 1998 2001 Swiss Re acquires Swiss Re’s first Swiss Re acquires Swiss Re acquires Mercantile & General Re ILS transaction Life Re Lincoln Re (M&G Re) Swiss Re’s first Life ILS transaction

Diversification Swiss Re’s long-term diversification strategy saw the development of the Life and Health business, especially through large acquisitions such as the purchase of M&G Re, Life Re and Lincoln Re.

2000 Swiss Re Centre for Global Dialogue The opening of the CGD placed Swiss Re at the forefront of global risk thought leadership.

Walter B. Kielholz speaking on the topic of “Reflection on Facing Risk” at the 42nd St Gallen Symposium, 2012.

50 Swiss Re | Business Report 2020 Walter B. Kielholz was elected Chairman of the Board of Directors on 13 March 2009. 2009

2005 2009 2017 Inducted into the International Elected Chairman of Campus Mythenquai Insurance Society Hall of Fame the Board of Directors Swiss Re Next opened in 2017. of Swiss Re The introduction of a flexible work culture would prove valuable for employees to adapt to the move to home office during the COVID-19 pandemic.

Global Financial COVID-19 pandemic Crisis 2005 2010 2015 2020

Indian Ocean Hurricanes Hurricane Ike Fukushima, Hurricanes Harvey, earthquake Katrina, Rita, New Zealand Irma, Maria. and tsunami Wilma earthquake, Thailand floods

2004 2006 2013 2020 Swiss Re acquires Swiss Re’s 150th anniversary Sale of ReAssure Since its opening, GE Insurance Solutions to Phoenix Group 30 St Mary Axe, or “The Gherkin”, has been an iconic part of the London skyline.

2011 Holding company structure The creation of a holding company structure allowed for the creation of distinct Business Units, providing more transparency and accountability.

Walter B. Kielholz: Timeline Swiss Re | Business Report 2020 51 Our leadership

Board of Directors

At the Annual General Meeting on 17 April 2020, Walter B. Kielholz Renato Fassbind Sergio P. Ermotti, Joachim Oechslin and Deanna Ong Chairman, non-executive Vice Chairman and Lead were elected as new members of the Board of Independent Director, Directors. Trevor Manuel and Eileen Rominger did Walter B. Kielholz was elected non-executive and independent not stand for re-election. Walter B. Kielholz was to the Board of Directors of re-elected as member and Chairman of the Board Swiss Reinsurance Company Ltd Renato Fassbind was elected of Directors for a one-year term of office. The in 1998 and to the Board of to the Board of Directors of shareholders also re-elected the following members Directors of Swiss Re Ltd in Swiss Re Ltd in 2011. He was of the Board of Directors for a one-year term connection with its formation in appointed Vice Chairman in of office: Renato Fassbind (Vice Chairman and 2011. He was Vice Chairman 2012 and Lead Independent Lead Independent Director), Raymond K.F. Ch’ien, from 2003 to April 2009 and Director in 2014. He chairs the Karen Gavan, Jay Ralph, Joerg Reinhardt, has been Chairman of the Board Nomination Committee and Philip K. Ryan, Sir Paul Tucker, Jacques de Vaucleroy, of Directors since May 2009. the Audit Committee and is a Susan L. Wagner and Larry Zimpleman. He chairs the Chairman’s and member of the Chairman’s and Governance Committee. Governance Committee and The Board of Directors consists of 14 members. the Compensation Committee.

For further information, please see p. 88 of the Financial Report

Deanna Ong Jay Ralph Joerg Reinhardt Philip K. Ryan Member, non-executive Member, non-executive Member, non-executive Member, non-executive and independent and independent and independent and independent

Deanna Ong was elected Jay Ralph was elected to Joerg Reinhardt was elected Philip K. Ryan was elected to the Board of Directors of the Board of Directors of to the Board of Directors of to the Board of Directors of Swiss Re Ltd in 2020. Swiss Re Ltd in 2017. He is a Swiss Re Ltd in 2017. He is a Swiss Re Ltd in 2015. He chairs She is a member of the Audit member of the Finance and member of the Nomination the Finance and Risk Committee Committee. She is also a Risk Committee and the Committee and the and is a member of the member of the Board of Investment Committee. Compensation Committee. Chairman’s and Governance Directors and Chairperson Committee and the Audit of the Audit Committee of Committee. He is also Swiss Re Asia Pte. Ltd. Chairman of Swiss Re America Holding Corporation.

52 Swiss Re | Business Report 2020 Raymond K.F. Ch’ien Sergio P. Ermotti Karen Gavan Joachim Oechslin Member, non-executive Member, non-executive Member, non-executive Member, non-executive and independent and independent and independent and independent

Raymond K.F. Ch’ien was Sergio P. Ermotti was elected Karen Gavan was elected to the Joachim Oechslin was elected elected to the Board of Directors to the Board of Directors of Board of Directors of Swiss Re Ltd to the Board of Directors of of Swiss Reinsurance Company Swiss Re Ltd in 2020. in 2018. She is a member of Swiss Re Ltd in 2020. He is Ltd in 2008 and to the Board In 2021, Sergio P. Ermotti will the Audit Committee and the a member of the Finance and of Directors of Swiss Re Ltd in be nominated for election by the Compensation Committee. She Risk Committee and the connection with its formation Annual General Meeting 2021 is also a member of the Board of Investment Committee. in 2011. He is a member of the to succeed Walter B. Kielholz Directors of Swiss Re America Compensation Committee as Chairman of the Board Holding Corporation. and the Investment Committee. of Directors. He is also a member of the Board of Directors of Swiss Re Asia Pte. Ltd.

Sir Paul Tucker Jacques de Vaucleroy Susan L. Wagner Larry Zimpleman Member, non-executive Member, non-executive Member, non-executive Member, non-executive and independent and independent and independent and independent

Sir Paul Tucker was elected Jacques de Vaucleroy was Susan L. Wagner was elected to Larry Zimpleman was elected to the Board of Directors of elected to the Board of Directors the Board of Directors of to the Board of Directors of Swiss Re Ltd in 2016. He is of Swiss Re Ltd in 2017. Swiss Re Ltd in 2014. She chairs Swiss Re Ltd in 2018. He is a member of the Finance He chairs the Compensation the Investment Committee and a member of the Audit and Risk Committee and the Committee and is a member of is a member of the Chairman’s Committee and the Finance Investment Committee. the Chairman’s and Governance and Governance Committee, the and Risk Committee. Committee, the Nomination Nomination Committee and the Committee and the Investment Finance and Risk Committee. Committee. He is also Chairman of Swiss Re Europe S.A. and Swiss Re International SE.

Our leadership Swiss Re | Business Report 2020 53 Our leadership

Group Executive Committee

Thierry Léger, former Chief Executive Officer Christian Mumenthaler Urs Baertschi Life Capital, was appointed Group Chief Group Chief Executive Officer Chief Executive Officer Underwriting Officer as of 1 September 2020. Reinsurance EMEA/Regional He succeeded Edouard Schmid, who decided Christian Mumenthaler was President EMEA to step down as of 31 August 2020. appointed Group Chief Executive Jonathan Isherwood, previously Head Globals Officer in July 2016. Prior to Urs Baertschi was appointed Reinsurance, was appointed CEO Reinsurance that, he held several leading Chief Executive Officer Americas as of 1 April 2020 and Regional positions within the company, Reinsurance EMEA and President Americas and member of the Group including Chief Executive Officer Regional President EMEA and a Executive Committee as of 14 August 2020. Reinsurance, Head of member of the Group Executive He succeeded J. Eric Smith, who retired Life & Health and Group Chief Committee in September 2019. on 13 August 2020. Since 1 September 2020, Risk Officer. He became a Prior to that, he served as the Group EC consists of 13 members; prior member of the Group Executive President of Reinsurance, to that, it consisted of 14 members. Committee in 2011. Latin America.

For further information, please see p. 102 of the Financial Report

Guido Fürer Hermann Geiger Russell Higginbotham Jonathan Isherwood Group Chief Investment Officer Group Chief Legal Officer Chief Executive Officer Chief Executive Officer Reinsurance Asia/ Reinsurance Americas/ Guido Fürer was appointed Hermann Geiger assumed the Regional President Asia Regional President Americas Group Chief Investment Officer global position as Head and a member of the Group Legal & Compliance and Group Russell Higginbotham assumed Jonathan Isherwood was Executive Committee in Chief Legal Officer in 2009. the role of Chief Executive appointed Chief Executive November 2012. In 2019, he He was appointed as a member Officer Reinsurance Asia and Officer Reinsurance Americas as additionally assumed the roles of the Group Executive Regional President Asia with of 1 April 2020, and Regional of Swiss Re Country President Committee with effect from effect from July 2019. Prior to President Americas and a Switzerland and Chairman of July 2019. that, he was Chief Executive member of the Group Executive the Swiss Re Strategic Council. Officer Reinsurance EMEA and Committee as of 14 August Regional President EMEA. 2020. Prior to that, he served as He became a member of the Head Globals Reinsurance. Group Executive Committee in September 2018.

54 Swiss Re | Business Report 2020 Andreas Berger Anette Bronder John R. Dacey Nigel Fretwell Chief Executive Officer Group Chief Operating Officer Group Chief Financial Officer Group Chief Human Resources Corporate Solutions Officer Anette Bronder joined Swiss Re John R. Dacey joined Swiss Re Andreas Berger joined Swiss Re in June 2019 and was appointed in October 2012 and was Nigel Fretwell joined Swiss Re as in March 2019 as Chief Executive Group Chief Operating Officer appointed Group Chief Strategy Group Chief Human Resources Officer Corporate Solutions and and a member of the Group Officer and a member of the Officer in May 2013 and was member of the Group Executive Executive Committee effective Group Executive Committee in appointed as a member of the Committee. Prior to that, he held July 2019. Before that, she held November 2012. He also served Group Executive Committee several leading positions at various leadership positions at as Chairman Admin Re® from effective July 2019. Prior to that, Consulting Group, Gerling Hewlett Packard, Vodafone, November 2012 to May 2015. he held various senior roles at and Global Corporate & T-Systems International and He was appointed Group Chief Barclays and HSBC. Specialty SE (AGCS). Deutsche Telekom. Financial Officer with effect from April 2018.

Thierry Léger Moses Ojeisekhoba Patrick Raaflaub Group Chief Underwriting Chief Executive Officer Group Chief Risk Officer Officer Reinsurance Patrick Raaflaub was appointed Thierry Léger was appointed Moses Ojeisekhoba joined Group Chief Risk Officer and a Chief Executive Officer Swiss Re in February 2012 and member of the Group Executive Life Capital and a member of was appointed Chief Executive Committee in September 2014. the Group Executive Committee Officer Reinsurance Asia, Prior to that, he served as Chief as of January 2016. With effect Regional President Asia and a Executive Officer of the Swiss from 1 September 2020, he member of the Group Executive Financial Market Supervisory assumed the role of Group Chief Committee in March 2012. In Authority FINMA and held Underwriting Officer. July 2016, Moses Ojeisekhoba several leading positions within was appointed as Chief Swiss Re. Executive Officer Reinsurance.

Our leadership Swiss Re | Business Report 2020 55 Cautionary note

Cautionary note on forward-looking statements

Certain statements and illustrations • the frequency, severity and development contained herein are forward-looking. These of insured claim events, particularly natural statements (including as to plans, objectives, catastrophes, man-made disasters, targets, and trends) and illustrations provide pandemics, acts of terrorism or acts current expectations of future events based of war; on certain assumptions and include any • mortality, morbidity and longevity statement that does not directly relate to a experience; historical fact or current fact. • the cyclicality of the reinsurance sector; • central bank intervention in the financial Forward-looking statements typically are markets, trade wars or other protectionist identified by words or phrases such as measures relating to international trade “anticipate”, “assume”, “believe”, “continue”, arrangements, adverse geopolitical “estimate”, “expect”, “foresee”, “intend”, “may events, domestic political upheavals or increase”, “may fluctuate” and similar other developments that adversely impact expressions, or by future or conditional verbs global economic conditions; such as “will”, “should”, “would” and “could”. • increased volatility of, and/or disruption in, These forward-looking statements involve global capital and credit markets; known and unknown risks, uncertainties and • the Group’s ability to maintain sufficient other factors, which may cause the Group’s liquidity and access to capital markets, actual results of operations, financial including sufficient liquidity to cover condition, solvency ratios, capital or liquidity potential recapture of reinsurance positions or prospects to be materially agreements, early calls of debt or debt-like different from any future results of arrangements and collateral calls due to operations, financial condition, solvency actual or perceived deterioration of the ratios, capital or liquidity positions or Group’s financial strength or otherwise; prospects expressed or implied by such • the Group’s inability to realise amounts on statements or cause Swiss Re to not achieve sales of securities on the Group’s balance its published targets. Such factors include, sheet equivalent to their values recorded among others: for accounting purposes; • the Group’s inability to generate sufficient investment income from its investment portfolio, including as a result of fluctuations in the equity and fixed income markets, the composition of the investment portfolio or otherwise;

56 Swiss Re | Business Report 2020 • changes in legislation and regulation, or • the outcome of tax audits, the ability to • limitations on the ability of the Group’s the interpretations thereof by regulators realise tax loss carryforwards and the subsidiaries to pay dividends or make and courts, affecting the Group or its ability to realise deferred tax assets other distributions; and ceding companies, including as a result of (including by reason of the mix of earnings • operational factors, including the efficacy comprehensive reform or shifts away from in a jurisdiction or deemed change of of risk management and other internal multilateral approaches to regulation of control), which could negatively impact procedures in anticipating and managing global operations; future earnings, and the overall impact of the foregoing risks. • the lowering or loss of one of the financial changes in tax regimes on the Group’s strength or other ratings of one or more business model; These factors are not exhaustive. The companies in the Group, and • changes in accounting estimates or Group operates in a continually changing developments adversely affecting its assumptions that affect reported amounts environment and new risks emerge ability to achieve improved ratings; of assets, liabilities, revenues or expenses, continually. Readers are cautioned not to • uncertainties in estimating reserves, including contingent assets and liabilities; place undue reliance on forward-looking including differences between actual • changes in accounting standards, statements. Swiss Re undertakes no claims experience and underwriting and practices or policies; obligation to publicly revise or update any reserving assumptions; • strengthening or weakening of foreign forward-looking statements, whether as a • policy renewal and lapse rates; currencies; result of new information, future events or • uncertainties in estimating future claims • reforms of, or other potential changes to, otherwise. for purposes of financial reporting, benchmark reference rates; particularly with respect to large natural • failure of the Group’s hedging This communication is not intended to be a catastrophes and certain large man-made arrangements to be effective; recommendation to buy, sell or hold losses, as significant uncertainties may be • significant investments, acquisitions or securities and does not constitute an offer involved in estimating losses from such dispositions, and any delays, unforeseen for the sale of, or the solicitation of an offer to events and preliminary estimates may be liabilities or other costs, lower-than- buy, securities in any jurisdiction, including subject to change as new information expected benefits, impairments, ratings the United States. Any such offer will only be becomes available; action or other issues experienced in made by means of a prospectus or offering • legal actions or regulatory investigations connection with any such transactions; memorandum, and in compliance with or actions, including in respect of industry • extraordinary events affecting the Group’s applicable securities laws. requirements or business conduct rules clients and other counterparties, such of general applicability; as bankruptcies, liquidations and other credit-related events; • changing levels of competition; • the effects of business disruption due to terrorist attacks, cyberattacks, natural catastrophes, public health emergencies, hostilities or other events;

Swiss Re | Business Report 2020 57 Contacts

Contacts

Swiss Re has 81 office locations in 29 countries. For a full list of our office locations and service offerings, please visit www.swissre.com

Investor Relations Media Relations Share Register Telephone +41 43 285 4444 Telephone +41 43 285 7171 Telephone +41 43 285 6810 [email protected] [email protected] [email protected]

Head office Swiss Re Ltd Mythenquai 50/60, P.O. Box, 8022 Zurich, Switzerland Telephone +41 43 285 2121

Americas Europe Asia-Pacific Armonk (incl. Middle East and Africa) Singapore 175 King Street Zurich Asia Square Tower 2 Armonk, NY 10504 Mythenquai 50/60 12 Marina View Telephone +1 914 828 8000 8022 Zurich Singapore 018961 Telephone +41 43 285 2121 Telephone +65 6532 2161 Kansas City 1200 Main Street London Hong Kong Kansas City, MO 64105 30 St Mary Axe Central Plaza Telephone +1 816 235 3703 London 18 Harbour Road EC3A 8EP Wanchai New York Telephone +44 20 7933 3000 Hong Kong 1301 Avenue of the Americas Telephone +852 2827 4345 New York, NY 10019 Munich Telephone +1 212 317 5400 Arabellastrasse 30 Sydney 81925 Munich Tower Two Los Angeles Telephone +49 89 3844 1200 International Towers Sydney 777 South Figueroa Street 200 Barangaroo Avenue Los Angeles, CA 90071 Cape Town Sydney, NSW 2000 Telephone +1 213 457 6190 Block B Telephone +61 2 8295 9500 The Boulevard Office Park Searle Street Beijing 150 King Street West Woodstock China Life Financial Centre Toronto, Ontario M5H 1J9 Cape Town, 7925 23 Zhenzhi Road Telephone +1 416 408 0272 Telephone +27 21 469 8400 Chaoyang District Mexico City Beijing 100026 Madrid Avenida Insurgentes Sur 1898 Telephone +86 10 6563 8888 Torre Europa Torre Siglum Paseo de la Castellana, 95 Tokyo Colonia Florida, Del Alvaro Obregon 28046 Madrid Marunouchi Nijubashi Building México City 01030 Telephone +34 91 598 1726 3-2-3 Marunouchi Telephone +52 55 5322 8400 Tokyo 100-0005 Paris São Paulo Telephone +81 3 5219 7800 11–15, rue Saint-Georges Avenida Brigadeiro Faria Lima 3064 75009 Paris Mumbai Itaim Bibi Telephone +33 1 43 18 30 00 One BKC Plot no. C-66, G-Block São Paulo, SP 01451-001 Bandra Kurla Complex Telephone +55 11 3073 8000 Rome Bandra (East) Via di San Basilio, 72 Mumbai 400 051 00187 Rome Telephone +91 22 6661 2121 Telephone +39 06 323931

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This report is printed on sustainably produced paper and is climate neutral. The wood used comes from forests certified to 100% by the Forest Stewardship Council (FSC). Original version in English. The Annual Report 2020 is also available in German. The web version of the Annual Report 2020 is available at: reports.swissre.com Order no: 1490793_21_en 03/21, 1850 en Swiss Re Ltd Mythenquai 50/60 P.O. Box 8022 Zurich Switzerland Telephone +41 43 285 2121 www.swissre.com