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Swiss Re proposes to return CHF 2.5 billion to shareholders via dividends and up to CHF 1.0 billion in a share buy-back programme

18 March 2015 Swiss Re

• The Board of Directors proposes a 10.4% increase in regular dividend to CHF 4.25 per share and an additional special dividend of CHF 3.00 per share1 • Share buy-back programme of up to CHF 1 billion proposed • Trevor Manuel and Philip K. Ryan put forward for election as new members of the Board of Directors; Raymond Breu to step down • 2014 EVM income of USD 5.2 billion, economic net worth USD 38.4 billion

At Swiss Re's upcoming Annual General Meeting (AGM) on 21 April 2015, the Board of Directors proposes a regular dividend of CHF 4.25 per share and an additional special dividend of CHF 3.00 per share. In addition, the Board of Directors proposes a public share buy-back programme of up to CHF 1 billion for future excess capital management measures. As Swiss Re has implemented the Swiss federal "Ordinance Against Excessive Compensation at Public Corporations", shareholders will cast a binding vote on compensation of the members of the Board of Directors and the Group Executive Committee at the 2015 AGM for the first time. The Board of Directors further proposes the election of Trevor Manuel and Philip K. Ryan as new non-executive and independent members. Swiss Re today publishes its 2014 Annual Report and the Economic Value Management (EVM) 2014 report.

Based on Swiss Re's strong performance in 2014, the Board of Directors proposes to increase the regular dividend to CHF 4.25 per share, up from last year's CHF 3.85 per share. In addition, a special dividend of CHF 3.00 per share is proposed. If approved by shareholders at the AGM, the dividends will be paid out on 27 April 2015. In addition, Swiss Re requests permission to establish a public share buy-back programme of up to CHF 1 billion at any time ahead of the 2016 AGM to achieve its objective of returning capital to shareholders when excess capital is available and other business opportunities do not meet its internal investment hurdle rate. Swiss Re will ask the AGM in April 2016 for permission to cancel the repurchased shares.

Swiss Re's Chairman Walter B. Kielholz says: "For some time now we have seen a trend of Swiss Re's economic value significantly exceeding its market value. I am convinced that Swiss Re should use this opportunity and invest in its own shares so the company and ultimately the shareholders can benefit from this premium. Additionally, all these proposals follow the clear capital management policy we have set out over the past few years: maintaining our regular dividend and growing it in line with long-term earnings as our highest priority, followed by business growth where it meets our profitability targets."

Compliance with new regulation

Swiss Re has implemented the "Ordinance Against Excessive Compensation at Public Corporations" (the Ordinance) one year ahead of the mandated implementation date. Shareholders will now cast a binding vote on the maximum aggregate amount of fixed compensation for members of the Board of Directors for the next term of office (between the AGM in 2015 and the AGM in 2016), the maximum aggregate amount of fixed and long-term compensation elements for the members of the Group Executive Committee for the following financial year 2016, as well as their retrospective variable short-term compensation for the preceding completed financial year.

Election of Board members

The Ordinance provides for an annual individual election of members of the Board of Directors and of the Chairman of the Board of Directors by the AGM of shareholders. The Board of Directors proposes Walter B. Kielholz to be reelected to the Board of Directors and at the same time be re-elected as Chairman of the Board of Directors for a one-year term of office until the AGM in 2016.

At the AGM on 21 April 2015, the Board of Directors further proposes to reelect the following members:

• Mathis Cabiallavetta
• Raymond K.F. Ch'ien
• Renato Fassbind
• Mary Francis
• Rajna Gibson Brandon
• C. Robert Henrikson
• Hans Ulrich Maerki
• Carlos E. Represas
• Jean-Pierre Roth
• Susan L. Wagner

As new, non-executive and independent members, the Board of Directors nominates Trevor Manuel and Philip K. Ryan. Trevor Manuel was a minister in the South African government for more than 20 years, 13 of which he served as Finance Minister until 2009. As a Chairman of Swiss Re America Holding Corporation Board since 2012, Philip K. Ryan has a thorough understanding of the company's business in its largest region in terms of premium income, the Americas. He brings a strong track record in global insurance and financial services positions to Swiss Re's Board of Directors. Detailed CVs can be found on www.swissre.com.

Mathis Cabiallavetta will stand for re-election as non-executive, independent Board Member for another one-year term of office but he will not stand for reelection as Vice-Chairman.

Raymund Breu will not stand for re-election at the upcoming AGM, having served on Swiss Re's Board of Directors for 12 years. Swiss Re would like to thank him for his contribution, especially as a member of the Board's Finance and Risk Committee as well as the Investment Committee.

Under the Ordinance, the members of the Board's Compensation Committee are also elected separately. Swiss Re's Board of Directors proposes the following Directors to be re-elected as members of the Compensation Committee:

• Renato Fassbind
• C. Robert Henrikson
• Hans Ulrich Maerki
• Carlos E. Represas

"Say on pay" regime at Swiss Re

The Ordinance requires shareholders to vote annually, separately and with binding effect on the aggregate amounts of compensation of the members of the Board of Directors and the Group Executive Committee. The shareholders amended the Articles of Association to include a "say on pay" allowing a differential vote for the first time:

- Shareholders will be asked to approve the maximum aggregate amount of fixed compensation of the Board of Directors for the next term of office, which corresponds to the period between the AGM in 2015 and the next AGM in 2016.
- With regard to Group Executive Committee compensation, shareholder approval will be split into two separate votes:

o Shareholders will be asked to approve the maximum aggregate amount of fixed and long-term compensation elements of the Group Executive Committee for the following financial year (2016).
o The aggregate amount of short-term variable compensation elements of the Group Executive Committee will be subject to a vote that relates to the preceding completed financial year (2014).

For the voting process for the proposed agenda items, Swiss Re will use an online platform where shareholders can register and provide voting instructions electronically.

Publication of the 2014 Annual Report

Today, Swiss Re publishes its 2014 Annual Report "We're smarter together", consisting of the Business Report and the Financial Report, including audited financial statements. The report is available online and can be downloaded from www.swissre.com/investors/financial_information/

For the holders of debt instruments issued by Swiss Reinsurance Company Ltd, Swiss Re also publishes today the Swiss Reinsurance Company Ltd Consolidated 2014 Annual Reports in English containing Swiss Reinsurance Company Ltd's audited annual consolidated financial statements and audited annual statutory financial statements for 2014. The full report is available online and can be downloaded from www.swissre.com/investors/financial_information/

Publication of the 2014 EVM Results

Swiss Re uses its proprietary Economic Value Management (EVM) as an integrated economic valuation framework for planning, pricing, reserving and steering its business. Following the publication of its 2014 US GAAP financial results on 19 February 2015, Swiss Re today publishes its 2014 EVM results.

In 2014, Swiss Re generated an EVM profit of USD 1.3 billion supported by strong new business underwriting, partially offset by a negative investment result. This compares to an EVM profit of USD 4.0 billion in 2013. As of 31 December 2014, Swiss Re's economic net worth (ENW) increased to USD 38.4 billion, up from USD 37.2 billion as of 31 December 2013. Economic net worth per share was USD 112.1 (CHF 111.4) as of 31 December 2014 compared to USD 108.7 (CHF 96.6) at the end of 2013.

For the first time since the introduction of the EVM framework in 2003, Swiss Re's 2014 EVM financial statements have been audited by PricewaterhouseCoopers Ltd.

The 2014 EVM report is released together with the full Annual Report 2014 and can be downloaded from www.swissre.com/investors/financial_information/

 

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