Swiss Re reports 31% rise in 2015 net income to USD 4.6 billion, increases dividend to CHF 4.60 and proposes new share buy-back; Christian Mumenthaler to become Group CEO as of 1 July 2016

23 February 2016 Swiss Re

• Group net income strong at USD 4.6 billion; 2011-2015 ROE and EPS financial targets successfully delivered • Property & Casualty Reinsurance USD 3.0 billion net income; ROE of 22.2% • Life & Health Reinsurance net income climbed to USD 939 million; achieved ROE target •Corporate Solutions net income USD 340 million; ROE of 14.8% •Admin Re® net income USD 422 million; USD 543 million gross cash generation for the year, ROE 7.5% • Attractive portfolio maintained at January P&C treaty renewals, despite challenging markets, showing continued success of differentiation through large and tailored transactions •The strong 2015 results, together with the strategic framework, provide an excellent base for the future •Board of Directors to propose 8.2% rise in regular dividend to CHF 4.60 per share and the authorisation of a new public share buy-back programme of up to CHF 1 billion •Christian Mumenthaler to become Group CEO on 1 July 2016, Michel M. Liès to retire

Swiss Re delivered a strong full-year net income of USD 4.6 billion for 2015, USD 938 million of which was earned in the fourth quarter. All three business units contributed to this result, with L&H Re in particular reporting a strong increase in net income after the successful management actions in 2014. With a clear focus during the past five years on the 2011–2015 group financial targets, Swiss Re successfully delivered on its return on equity (ROE) and earnings per share (EPS) targets. Given the strong business

performance and the very strong capital position, Swiss Re's Board of Directors will propose raising its regular dividend to CHF 4.60 per share. The Board of Directors will also propose to the Annual General Meeting the authorisation of a new public share buy-back programme of up to CHF 1.0 billion.

Swiss Re's Group Chief Executive Officer, Michel M. Liès, says: "We have delivered a strong performance based on our underwriting discipline over the past five years and end this period with one of our highest-ever profits. I am also pleased to announce that we achieved our return on equity and earnings per share targets, even as the market environment has changed considerably since 2011. L&H Re bounced back with a strong operating result after the management actions we undertook in 2014. We maintained a strong capital position, increased the regular dividends with earnings and launched a share buy-back programme. At the same time we broadened the offering of the services we can bring to our clients."

Strong full-year Group results

All Business Units contributed positively to a 31% increase in Group net income to USD 4.6 billion in 2015 (vs USD 3.5 billion in 2014). The result benefited from strong underwriting, the absence of major natural catastrophes and from reserve releases, as well as from the strong result in L&H Re.

The ROE for 2015 was 13.7% with EPS of CHF 12.93 or USD 13.44, compared with CHF 9.33 or USD 10.23 for the prior year.

Premiums earned and fee income for the Group totalled USD 30.2 billion for 2015, compared to USD 31.3 billion for 2014, mainly reflecting unfavourable foreign exchange rate movements. At constant exchange rates, premiums and fees increased by 4%.

Swiss Re achieved a strong full-year investment result in a difficult low yield environment. The Group's return on investments (ROI) was 3.5% for 2015 (vs 3.7% in 2014), as Swiss Re continued to maintain a steady return, with a high-quality, well balanced portfolio. Net investment income was USD 3.4 billion (vs USD 4.1 billion in 2014), in part driven by net asset outflows.

Common shareholders' equity was USD 32.4 billion at the end of 2015 (vs USD 34.8 billion at the end of 2014). Book value per common share was USD 95.98 or CHF 96.04 as of 31 December 2015, compared to USD 101.78 or CHF 101.12 at the end of 2014.

Significant capital returns to shareholders; new public share buy-back proposed

Based on the Group's capital strength, as reflected by the estimated Group SST economic capitalisation of around 205% at the end of 2015, Swiss Re's Board of Directors will propose an 8.2% increase in the regular dividend for 2015 to CHF 4.60 per share, up from CHF 4.25 for 2014. The dividend will be paid after shareholder approval at the Annual General Meeting on 22 April 2016. Swiss Re launched a share buy-back programme of up to CHF 1.0 billion in November 2015; to date, shares for a purchase value of approximately CHF 900 million have been bought back. The Board of Directors will propose to the 2016 AGM the cancellation of repurchased shares by way of share capital reduction.

Swiss Re plans to continue to return capital to shareholders, and the Board of Directors proposes to seek authorisation for a new share buy-back programme of up to CHF 1 billion to be executed before the 2017 AGM. It will only be launched if excess capital is available, no major loss event has occurred, other business opportunities do not meet Swiss Re's strategic and financial objectives and the necessary regulatory approvals have been obtained. These capital measures are expected to bring the total amount of
capital returned to shareholders to USD 12.1 billion since the implementation of the new Group structure in 2012, even excluding the upcoming proposed share buy-back.

P&C Re delivers strong net income of USD 3.0 billion; ROE of 22.2%

P&C Re's net income declined to USD 3.0 billion in 2015 (vs USD 3.6 billion in 2014), following price softening, large man-made loss burden as well as lower realised investment gains. The results reflected continued solid underwriting performance supported by benign natural catastrophe experience and prior-year net reserve releases. The combined ratio was 86.0%, compared to 83.7% for the previous year.

Net premiums earned were USD 15.1 billion (vs USD 15.6 billion in 2014). The decrease was mainly driven by foreign exchange rate movements. Excluding this impact, premiums earned increased by USD 497 million, driven by higher premiums in US casualty and higher earnings from contracts written in prior years in the EMEA region.

L&H Re delivers strong increase in profitability; meets ROE target

L&H Re reported net income of USD 939 million for 2015, reflecting a strong operating result, lower interest charges and net realised gains. This compared to a loss of USD 462 million in 2014, which was mainly due to management actions taken to address the pre-2004 US individual life business.

The L&H Re segment met the 10%–12% ROE target set for it at the June 2013 Investors' Day with an adjusted ROE of 11.8%. Unadjusted, the 2015 ROE was 15.7%.

Premiums earned and fee income decreased by 2.7% to USD 11.0 billion (vs USD 11.3 billion). At constant exchange rates, premiums earned and fee income were 6% higher in 2015, benefiting from new longevity deals in Europe and large transactions in Australia.

Corporate Solutions net income 6.6% higher; ROE 14.8%

Corporate Solutions delivered a net income of USD 340 million in 2015 (vs USD 319 million in 2014), reflecting continued profitable business performance across most lines of business and increased investment income.

Premiums earned were USD 3.4 billion, a decrease of 1.9%, driven by the challenging market and foreign exchange rate movements. At constant exchange rates, premiums earned increased by 1.7%.

The combined ratio slightly increased to 93.8% from 93.0% in 2014, due to higher large man-made losses. The quality of the book remained consistently high year on year, with better than expected natural catastrophe experience. Corporate Solutions opened operations in a number of locations during the year expanding the distribution network to 52 offices in 20 countries.

Admin Re® net income of USD 422 million; part of Life Capital as of 1 January 2016

Admin Re® reported a strong net income of USD 422 million for 2015 (vs USD 34 million in 2014). The result was driven mainly by higher realised gains from sales of assets as part of the preparation for Solvency II and tax credits in the UK during 2015. The 2014 result was impacted by the loss of USD 203 million on the sale of Aurora National Life Assurance Company.

Gross cash generation was strong at USD 543 million in 2015, including positive impacts from UK assumption updates, primarily to mortality rates, and the UK half-year valuation. The acquisition of Guardian Financial Services has positioned Admin Re® as a leading closed life book consolidator in the UK.

Commenting on the Group's full-year results, Swiss Re's Group Chief Financial Officer David Cole says: "These results show that we are well positioned to capture available opportunities, despite headwinds that the entire industry is experiencing as a result of the tough market environment. Looking ahead, we are in a solid position to combine our capital strength with financial flexibility in order to continue to profitably grow our business."

Fourth quarter results

The Group's net income for the fourth quarter was USD 938 million, up from USD 245 million in the same period of 2014. The comparable prior quarter result reflected the impact of management actions and the unwinding of an asset funding structure supporting a longevity transaction, both in L&H Re. The Group ROI for the quarter was 2.7% (vs 3.6% in Q4 2014).

P&C Re net income declined to USD 703 million for the fourth quarter of 2015 (vs USD 1.2 billion in Q4 2014), driven by lower realised gains. The quarter was impacted by flood losses in the UK and in India. Premiums earned declined to USD 3.7 billion, though measured at constant foreign exchange rates, premiums earned were flat. Growth in US casualty was offset by lower motor business in Asia and property business in EMEA and Asia.

L&H Re reported a net income of USD 176 million. This compared to a USD 734 million net loss in the prior-year period, which reflected the management actions taken in 2014. The operating margin improved to 7.8%. Measured at constant exchange rates, premium and fee income was slightly higher based on new business that was written in the UK and in Asia.

Corporate Solutions reported fourth quarter net income of USD 16 million (vs USD 70 million), after higher than expected large man-made losses and losses attributable to insurance in derivative form due to mild weather in December 2015. Premiums earned were USD 858 million in the fourth quarter, a decrease of 1.4%, driven by the challenging market and foreign exchange rate movements. Measured at constant exchange rates, net earned premiums increased by 1.3%. The combined ratio was 99.5% (vs 93.4%).

Admin Re® delivered net income of USD 152 million. In the fourth quarter of 2014 the business unit reported a net loss of USD 185 million, driven by the USD 203 million loss on the sale of Aurora. Gross cash generation for the fourth quarter was USD 278 million, down from USD 330 million in the prioryear period, which included the USD 217 million proceeds from the sale of US subsidiary Aurora National Life Assurance Company.

Swiss Re maintains attractive portfolio despite rate pressures at January 2016 renewals

Swiss Re renewed USD 8.8 billion as compared to the USD 8.6 billion premium volume up for renewal. This represents an increase of 3%, entirely driven by a 16% rise in large and tailored transactions whereas the exposure to flow business decreased by 4%. Risk-adjusted price quality decreased by 3 percentage points to 102%, still meeting Swiss Re's economic return hurdles as the success of differentiation through large and tailored transactions – with different terms and conditions – continued.

Swiss Re's targets focus on profitability and economic growth

Swiss Re has met its 2011–2015 ROE and EPS financial targets. Results on the economic net worth per share target will be reported with the publication of the 2015 Annual Report and EVM Report on 16 March 2016.

Swiss Re introduced two new Group financial targets starting in 2016. Over the cycle, the company targets a 700 basis point ROE above the risk-free rate (10-year US government bonds). In addition, the company aims to grow economic net worth per share by 10% per year.

Group Chief Executive Officer, Michel M. Liès, says: "Our strategic framework, which we unveiled in December 2015, will further ensure our ability to respond to market challenges by being agile. In addition, the framework will support us in quickly seizing new opportunities in the future as well. It will continue to support us as we drive to further differentiate Swiss Re in a challenging environment and broaden and diversify our client base. Managing risk is our core business and has been so for more than 150 years. By applying fresh perspectives, knowledge and capital to anticipate and manage risks, Swiss Re makes the world more resilient."

Christian Mumenthaler to become Group CEO on 1 July 2016, Michel M. Liès to retire

Swiss Re's Board of Directors announces that Christian Mumenthaler (46, Swiss citizen), currently CEO of Reinsurance, will become Group Chief Executive Officer of Swiss Re as of 1 July 2016. Michel M. Liès will retire. Walter B. Kielholz, Chairman of the Board of Directors, says: "The Board of Directors wishes to thank Michel M. Liès for the more than 35 years of service to Swiss Re, the last four as Group CEO. Throughout his career, Michel has lived Swiss Re's highest values and has been key to our Group's continued strong performance. Under his leadership over the past four years, net income has almost doubled, the capital base has increased significantly and we have distributed more than USD 12 billion of excess capital back to shareholders. It is fitting that we make this announcement at the end of a successful 2011–2015 financial target period, and after having introduced a new strategic framework."

Michel M. Liès says: "I am passionate about Swiss Re's future. I am convinced that Christian Mumenthaler and his team will further strengthen the role of Swiss Re in our industry and our society more generally. It is an honour and a privilege to work for this great company. I will always be proud to have been part of Swiss Re."

Christian Mumenthaler has been with Swiss Re for 17 years, most recently as CEO of Reinsurance. The Board is delighted to have found an internal successor who can transition smoothly and who has an intimate understanding of and experience in implementing the Group's strategy. For nearly five years, Christian Mumenthaler has led the Reinsurance Business Unit, which is responsible for approximately 85% of the Group's revenue. Christian Mumenthaler has been key to P&C Re's continued outperformance and to getting L&H Re back on track. The nomination of Christian Mumenthaler demonstrates both the depth of Swiss Re's talent and the importance of maintaining Swiss Re's distinctive culture.



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