Good morning, ladies and gentlemen, and welcome to Swiss Re's media conference. My name is Elena Logutenkova. I am head of media relations and corporate reporting at Swiss Re. We're joined today by Swiss Re Group CEO, Christian Mumenthaler, and our Group CFO, John Dacey. We will start with a presentation of our 2020 financial results, and then we look forward to taking your questions. You can follow this media conference today via live webcast on swissre.com, where you will also see the slides that we will be presenting, or by dialing into a conference call, which is audio only. Please note that for the Q&A session, if you would like to ask a question, you will need to dial into the conference call. The numbers you can find at the bottom of today's news release. Now it is my pleasure to hand over to Christian Mumenthaler, our Group CEO. Thank you, Elena, and hello, good morning, good afternoon, or good evening to all of you out there. I hope you're safe and well through these crazy times. I definitely hope that by the half year result, we'll be able to meet physically, but obviously at this stage, this is how we have to live. I hope you're all well wherever you are. Before John brings us through the numbers, I'd like to give you a higher level overview of how I see the numbers, the renewals, our situation on the sustainability front. It's structured in four parts. The earnings in context comes first, then P&C pricing update, the capital actions, and sustainability. Let me start with earnings in context. If you could go to the next page. I think the easiest way to explain the result of last year of - $0.9 billion is to talk about two separate parts. One is the COVID-19 impact, which was a $3.9 billion pre-tax impact. I'll talk about that in the next three slides to give you a bit of sense where it's coming from and how we see things going forward. The underlying $2.2 billion net income, which excludes COVID-19, which was actually a very good number. We're very happy with that one. I'm also going to explore a little bit of how the underlying result was composed of and what were the drivers. Let me first dive into COVID-19. Slide four shows the drivers behind that. Two of the most important drivers, which we have shown the last two quarters, I think. The first one, business closings in Europe, is the driver for the majority of our business interruption losses. Business interruption loss is not a big topic in Asia. It's much less in the U.S. It's more a European theme for language reasons. Here's the key driver. This is sort of an index that shows how many businesses were closed, non-essential or essential businesses through the quarters. You can see that we had a very big Q2 event from that perspective, a much lower, let's say, summer month Q3 event. Q4 was probably worse than most of us anticipated as we were in Q3, partially due to new virus mutants, but probably also too late reactions overall to a rise of numbers after a few months that were frankly very good. Then on the bottom, you see the excess mortality, U.S. This is still the other slides. Slide number four, please. On the bottom, you see excess mortality in the U.S., England, and Wales. That's the areas where we're most exposed to in terms of mortality. You can see that in Q2, there was a big excess mortality in England, Wales, but also in the U.S. This was a bad quarter. Q3 was calmer, then again, Q4, particularly towards the end, also in the U.S., had a heavy death toll. These are the underlying drivers which lead to the claims on page number five. This chart was also shown to you twice already. This is an update. You can see on the very right, the number $3.9 billion, and how it's split amongst quarters. Quarter one, we had the beginning of it, 12%. Q2, we had the majority, 53% of it. Q3 was relatively mild, 11%, and Q4 was 24%. The one left to that, you can see how much is paid and case reserves and how much is IBNR. Difference is paid and case reserves is if you have some concrete notification, some clients, that becomes a case reserve. IBNR means Incurred But Not Reported. We have to book claims which we think based on our analysis have happened but haven't been reported to us, and this is the so-called IBNR. You can see the split in different buckets as we did in the last few quarters. I will just highlight two of these buckets. Business interruptions, you can see this is where we have the biggest uncertainty because the paid and case reserves are still very small and probably much smaller than we thought half a year ago. There's a big uncertainty here. We know the exposure. We hear from our clients, so we can try to get to a number, but this is certainly a number that has a much higher uncertainty around it. Then mortality, the 912. This is important just in comparison to other companies. There's two ways you can define this number, this claims number. The first one would be to say it's all the claims where it is clear that the person has died from COVID-19. When you have a notification on the death certificate, which will be a much smaller number, or what we picked here is basically excess mortality over the last three, four years. Our number is higher, but it also means that we know there's lots of cases where people die of COVID-19, where it's not official. Therefore, we think that this definition probably makes a bit more sense. You can take both, and it's just important to note the difference. The total will be the same, so it's just a classification question. All through the year, we've tried our best estimate approach. I'm really happy with our claims teams who have thought very diligently about this, and by half year were courageous to step forward and had a pretty good sense of how big this would become, and this assessment hasn't fundamentally changed since then. We can go to the next page in terms of outlook. Obviously, always difficult to give an outlook when we don't know how it will end. I guess most of us have a scenario in our head that vaccination campaign will work. We all look at Israel, where you have a very high vaccination rate. They started towards the end of last year. They rapidly vaccinated, in particular, people over 60. Now most people, 80%, have received the second dose, and we see a sharp drop in terms of new cases in that age band, and also a sharp drop of hospitalization in that band. That gives us the hope that indeed, things will get better in many parts of the world. Based on that background scenario, we have the event cancellation business where we think something lower than $200 million is still up for 2020. This is based on the fact that Corporate Solutions has exited this business in 2019, the policies still have to run off. We know the exposure is shrinking. Obviously also our clients, where we reinsure things, have latest last year stopped to write this kind of business so that there's a runoff in sight. The business interruption side, there's new language introduced all through the year, the biggest one is obviously the one renewal we just finished. The exposure is drastically reduced, which is why a bit independent of how the pandemic goes, we see another exposure of about CHF 100 million or less than CHF 100 million. You have a bucket credit surety, other lines like disability. This will be based on secondary effects, more the economic effects of the pandemic. They haven't materialized yet. We don't know yet how big they will be. The estimates in our scenario are less than $200 million. That's the P&C lines, both CorSo and P&C. In mortality, like in the past, we think it's easier to just give you a sensitivity. The sensitivity is for every 100,000 U.S. excess death, there will be an extra claim of about $200 million. This very much depends on the vaccination campaign, how things go. January was a heavy month in the U.S. but you can see now cases dropping quite sharply in the U.S., new hospitalizations also. We are hopeful that we're going to see also the death rates drop in the U.S. Hopefully, this gives you a sense of how we see COVID-19 in 2021. I would like now turn to the underlying business, the $2.2 billion of earnings we had underlying, because I think there's a lot of good news, in my view, in how things have developed. First, P&C Re on the left side. We had announced in January 2020 that we expected 97% normalized combined ratio. The actual number is extremely close to that. Indeed, we're able to continue to improve the quality of the portfolio. You see very nicely the whole pricing cycle on this chart. This is the normalized combined ratio, which was very high, close to 100 for four years in a row, started to decline in 2019, and now again, 2020. With the renewal we have done, which consists of also a lot of pruning, we actually announced a combined ratio of 95% or below for P&C Re. We see good momentum here, and we're basically going back towards the underwriting year 2014 after a difficult period. On the right side, you can see Corporate Solutions. We don't try to confuse you. There's two lines here. The blue one is the same normalization method as in reinsurance, which only takes into account Nat Cat and previous year developments. In CorSo, man-made losses also play a big role. The gray dotted line is actually the one that also normalizes for large man-made losses. You can see that last year we were below 100- Christian, we've lost your microphone. John, perhaps we should go over to you while we reestablish the connection. That'd be fine. I'm sure we'll get Christian back online in just a moment. Why don't I jump to the, or let's see if we've got another ability to bring him back in the next minute or two. If it doesn't come back online, then I'll deliver the financial figures. Thank you everyone for your patience here. Elena, can you hear me? Yes, we can hear you. I'm sorry. This is, I guess, Murphy's Law. Yes. My computer, something happened. I don't know. I'm really sorry for everyone. Can I continue from here, Elena? Everything else fine? Yes, please. Okay. Sorry, everyone. Where did I break off? Did I talk about the left and the right charts? The difference between the blue line on Corporate Solutions and the gray one. Okay. Excellent. As you can see here, the normalized for man-made in CorSo was 101 last year. We have said, based on everything we're seeing right now, that next year we should be below 97. This year, we should be below 97 in terms of combined ratio. This contrasts to the 98 we had originally thought when we started this whole restructuring in Corporate Solutions. Overall, very happy with what's happening in CorSo. Let me go over to the next slide, which is around asset management. I have to say that we're extremely pleased with how asset management has worked for this year. The ROI was 3.5%. Running yield is 2.4%. This doesn't show the full quality of what has been achieved. Very early on in February already, asset management and all of us, risk management, finance, we realized that this could become a very big pandemic. Therefore, we started to hedge the portfolio, but also to work on the different segments, segment by segments, in terms of how exposed we think they would be to the pandemic. As a result of that, we had a much lower exposure to fallen angels versus the market of 50% and extremely low impairments of $27 million only in this whole book. As Guido has shown to you in the last Investor Day, the portion of unrealized gains with a maturity of over 10 years, so the substance that protects the yields is very high for the Swiss Re group. If you go to the next page, maybe. As usual, I try to give a bit of a summary of the different business units and how I see the outlook. Here you can see the different as reported numbers in terms of ROE, but you can also see the reported number excluding COVID-19, which for P&C, we were 13%, Life & Health above 10%, and Corporate Solutions above 16%, which was aided and helped by very low man-made claims activities. In terms of outlook, based on what we have done on the renewal, you can see I put a green outlook for 2021. The whole portfolio quality has improved very significantly. On Life & Health, we put a yellow dot. There's not the same price momentum in Life & Health. On top of that, reaching the ROE is challenging with these very low interest rates, which bloats the equity. On Corporate Solutions, also the momentum, very strong, very positive outlook. Finally, iptiQ, our white labeling digital business grew 76% in terms of core business premiums last year and added a lot of partners. We're now to 40 partners, very bullish about this too. This is a bit the assessment of the businesses for 2020. I'd like to go further now, look at the renewal, and looking ahead. A s I said in the Investor Day towards the end of last year, the focus of this renewal was very much margins. Improving the margins was at the heart of it. We wanted to tighten terms and conditions. This was vital to exclude or clarify the language around business interruptions. We wanted to significantly cut casualty, in particular in the large corporate risks, which is the most dangerous part in the U.S. On the Nat Cat side, we wanted to lower the exposure to frequency events. These are the so-called aggregates, which means these are covers that company writes that add up all the losses you have during the year, also the small losses, and the total sum of that then determines whether you have to pay out a cover. With climate change, we've seen some of the secondary perils, the smaller ones, which are less modeled and less understood, increase a lot. We have reacted with increasing our pricing models on all of that, but we still don't feel comfortable to have a too strong position in that. It was a clear target to also reduce on these property aggregates. On the bottom here, you can see the results, more than 98% of the renew treaties have exclusions. In terms of pandemics, there's still a bit of multi-year treaties that we haven't renewed yet, so we're not at 100%, but there's a massive decline. On the casualty side, we cut 55%, this large corporate risk segment. We have more than $500 million less aggregate limits in these property aggregates. All of that helped us to get to an even more improved portfolio of a combined ratio, which should be below 95% in 2021. On the next slide, you can see the result of the renewal. We start on the left side with $8.8 billion of total renewable business. This is basically business that comes into the market this year. Last year, some of the multi-year treaties, for example, don't come on the market, so they would be excluded here. You start with CHF 8.8, you have business you cancel in some of the categories I just mentioned, which leads to CHF 7.9. Within the business you renew, there's a mixture of price increases and cutting some of the shares in the same areas like casualty, aggregates, and property, which is a reduction of CHF 0.5 billion. There's some new business, all of that leading to an estimated outcome of CHF 7.8 billion, which is a premium change of -11% from the renewable year- to- date. In terms of price changes, we write here nominal price change 6.5%. This includes higher loss assumptions of 1.5%. It means that across different lines of business, we have adapted our models to be more conservative by 1.5%. If you took that on a like for like basis, the improvement is actually 8% nominal. On the next slide, I can show you a little bit the composition and what happened where. I will focus mostly on the left side. You see the different lines of business. Nat Cat had good price changes, very good price changes, but book stays the same. That's because of the reduction of aggregates in particular. There's actually growth on the rest. On the property side, there's a reduction of 15%, which is despite some price changes, but this is business that's quota share with low margin, which are borderline. We didn't write them. Specialty, we grew a little bit, and then casualty, we saw the decrease that we had talked about. In casualty, actually, the price increase was not that high. We were a bit surprised how bullish the market was. Some clients retained it actually, and some competitors went into it. I think this the, probably the effect of the price increases we could see. As a result of that, it didn't actually increase as much as we thought it should. This also helped the pruning that we have done. Overall, we're very satisfied with that. It fits what we had expected in terms of economic return. It's a significantly improved quality portfolio. On the next page 13, I thought it's interesting maybe to dig a little bit into the volume loss. You might ask, why did you lose so much business? What is happening? What you can see here is basically the delta between two distributions. The first one is the outcome of last year. We segmented last year's outcome as priced last year in a segment below 90% combined ratio, nominal combined ratio, a segment of 90%-100%, and a segment over 100%. We compared it to the outcome of this year. How much premium volume do you have in these different segments? You can see that in the below 90% and 90%-100%, we actually grew premiums, but the big reduction is all above 100% combined ratio. You might ask, why did we write above 100% combined ratio last year? Why do we have so much here? There's always this very large pool of premium of businesses with less volatility that have relatively thin margin. This is an efficient market. If you have interest rates of 2% like the U.S. had last year, and you have a duration of five years, you can write business above 100% and if the capital charge is not too big if it's low volatility, it can make economic sense. It's always a much more tight margin business that you have in this segment. Now obviously with increasing the loss takes, but also the new discount rate reflecting the new interest rate environment, it becomes much tougher to write much in this segment. This led to the conclusion to shrink the portfolio to something of higher quality. Hopefully this gives you a sense of the renewal. One word around CorSo on page 14 now. You can see CorSo. CorSo, the renewal is much smaller in CorSo. We don't talk about renewal. This is more a constant writing of business during the whole year. There's a little bit more in January, but it's very different to P&C, where the January renewal is 46% of our portfolio. On the left side, you can see the over a longer period of time, all of these pricing charts, price quality change. The strong line is overall CorSo, and the dotted line is property, which had a much bigger decline over time and then came up much stronger. You can nicely see how on this compound price quality change, we're back to underwriting years 2013, which were clearly positive underwriting years still as seen from today. The risk-adjusted price quality improvements last year were 15%, is very strong, followed by following 12% in 2019. On the right side, you can see where we shrunk, where we grew over this period of time. The left side very much reflects what we had said, where we would shrink, like U.S. casualty or aerospace. There's very strong declines in the pruning, but we also saw opportunity in property, accident health, engineering, D&O, and that probably reflects what you can see on the left side, where you had very strong price increases in property, for example. This is where Corporate Solutions is. This leads me to page number 15. We propose a stable dividend, even though we had obviously some unprecedented times, a tough year. It's also based on a very positive outlook. Unchanged CHF 5.90 Swiss francs. On the right side, I repeat the capital management priorities we have now since many, many years. The first priority is to ensure superior capitalization at all times and maximize financial flexibility. This is clearly given. We went from a target to a range, like all competitors have. The range, our range is 200% to 250% SST ratio, and obviously, we are in this range. The second priority is to grow the regular dividend or at minimum, keep it where it is, which is what we decided to do. Priority number three, deploy capital to new business growth, and we certainly hope that as things have improved now quite a bit in P&C Re and CorSo, there will be opportunities to deploy capital. Priority number four, if we can't deploy capital, is to repatriate to shareholders. This is around capital, and then let me end on page 16 around ESG. ESG is obviously a very broad topic with many other aspects, including the social and governance aspect. I thought maybe what I should do here is focus a little bit on the E, on the environment, because that is a topic that's very close to our business model and who we are. There's a lot of things happening right now, which I'm not sure everybody is aware of. You can see a lot on this chart, the word net zero. There is rising consensus around the world that we must take a target like 2050 and basically halve the net CO2 emissions by then to zero, which means efficiencies, changing technologies, trying to get out as much as you can of these different emissions. The rest that remains has to be extracted from the atmosphere through either new technologies that do it directly or through forestation, for example, other means. 2050 becomes this net zero becomes a very strong guiding light. The E.U. certainly is behind that. I think the new U.S. administration, too, we're going to see a very big change here. China has committed to net zero by 2060, but they're committed to that, and so far, everything they have executed on it. There's this huge political momentum we will talk more about, I think, as the pandemic recedes because the whole issue of climate change comes back to the fore. What also is happening is that investors are increasingly looking at that. There's a huge momentum. We are part and actually founding member of the Net-Zero Asset Owner Alliance, which at this stage has asset owners of $5 trillion come together. We have all pledged to have that portfolio at net zero by 2050, which means that the companies within these portfolios have to reduce the CO2 emissions, and the portfolio overall has to be zero by 2050. If companies are not making enough progress, they will need to divest these companies, which is obviously not what the companies want because these are very high-quality investors, long-term investors in the pension fund area and the insurance area. This is creating pressure on CEOs all around the world, certainly the Western World. As a consequence, you also see more and more companies going in that direction and falling in line, basically pledging to be net zero by 2050, which is something we have done several years ago. The important thing to understand by doing that, in particular, the consumer-oriented companies obviously have a high interest of making that pledge, net zero by 2050, is that you can only achieve this if your own operation is net zero, which is usually the simplest part. Secondly, that all power, all energy you're using is net zero. The so-called Scope 3 is that every company that delivers anything to you needs to be net zero, and your product, as you deliver them to the world, need to be net zero. The effect of this increasing pool of also very large companies having pledged net zero, and we're one of them, means that they will put a lot of pressure on the whole value chain, on the whole delivery chain, on every company that delivers to them, which typically in many industries are hundreds or even thousands of companies that are delivering to them. I think this is going to be a big topic of 2021. I see a huge momentum more than ever before because of all of these factors, the political factor, the factor of the investors putting pressure on, and now actually company CEOs, a lot of them are taking this very seriously, making pledges and then also making plans to implement that. Within all of that, Swiss Re is extremely well-positioned. We have also made a pledge to be net zero by our own operation by 2030, as you know, and we're following all of this to make sure that we are net zero by 2050. Which also gives us a very privileged position in many of the rankings and the assessments of the rating agencies overall. Hope this is useful to give you that overview. Now I'm going to hand over to John for the financial highlights. Again, sorry for our technical glitches, but it worked well. Thank you very much. If we can do a sound check, everything's okay? Yes, it is. Very good. Thank you, Elena and Christian, for your agility here. Let's see if we can move on and look at some of the key figures here. The summary page on 18 as Christian said, both the actual reported U.S. GAAP results in 2020 by comparison to 2019, and at the bottom, the adjusted figures for the COVID losses. Again, we're not trying to confuse you, but we do show both the figures ex-COVID, distinct from what we call normalized losses for Nat Cats and other large events, as well as for the development of reserves, ±, during the course of the year. Maybe we start in a little bit of a deeper dive into P&C Re on page 20. Here again, apologize if I repeat some of the positions of Christian, but I think it's important to say that we grew this book of business. Importantly, premiums earned up 8% year-on-year. The underwriting was undoubtedly massively impacted by the COVID. The loss of $247 million is what we've reported. That's compared to a profit ex-COVID of, we've estimated to be $1.3 billion. The current activities of P&C Re are profitable unambiguously once we align for the COVID losses. That's clear also in the combined ratio chart that you see in the right side of this page, where a material reduction over not only last year, 2019, but the last three years. If we go to the next page, slide 21. A couple important things here. One is, in spite of the operational challenges that the pandemic has given our business, we managed through them, and as we managed through them, we also were conscious of the costs that we're spending to support these operations. Our cost ratio continued in 2020, a decline in the U.S. GAAP basis from 31.1 to 30.3. Efficiency gains across the value chain and a continued reallocation of resources for those areas where we think our future is more interesting. In those areas of solutions and transactions, we continue to see an increased economic contribution on the right side of this page of the solution space in P&C Re and importantly with the transactions. More than 200 transactions closed. These are oftentimes bespoke deals with individual clients. What's remarkable is that in spite of working distance and not necessarily being able to meet in person the way that we have been for the last 150 years, we were able to get these deals done with great client relationships that have been built up over those years. We go on to Life & Health Re on slide 23. Again, a strong premium growth of almost 7%, supported by what we saw, some larger transactions. The margin down materially because of the COVID losses on the right side of the page. Down on the lower right, you see the net income with and without COVID. Life & Health Re still made a profit in the year in spite of a pre-tax loss from COVID of $1 billion. After we remove those on a tax effective basis out, we would have shown a profit of $855 million. The running yield, which is an important component for all our businesses, but especially on Life & Health, has decreased, but it's remained robust at 3%. The ROI for the year down at 3.7%. On the next page, again, we see a similar message to P&C Re on the efficiency side. Our ability to continue to write business without increasing expenses materially with the active cost management discipline that we maintained during the course of the COVID crisis. On solutions, again, an increase as well as transactions. Here, transactions even more important is a total, about 39% of the economic profit for 2020. As I move on from Life & Health to Corporate Solutions, Christian, I think that gave you a clear sense of the turnaround in action. The one thing I would say is on the volumes of Corporate Solutions, we fully expected that we would not show $4 billion of premiums earned in 2020 when we began the year. What we found, as Christian identified, was there are important pockets of business we were able to expand. Even though we pruned more than $800 million of premium in those lines, which we wanted to exit or reduce materially, the actual reduction in volume is only down 3% as a result of finding opportunities to redeploy capital and write attractive new business. Again, on the right side, the combined ratio with and without COVID is dramatically different. Here, the ex-COVID number is even better than what we would consider a normalized number. For Corporate Solutions, natural catastrophes were similar to what we expected. In reality, we had a strong positive momentum from prior year reserve adjustments, where we were actually able to release some reserves, which ended up being redundant during the course of the year, and that helped improve that reported or the ex-COVID combined ratio. When we take that impact out, we go back up from 93.2 - 96.8. Still a very healthy rate that itself was positively influenced by a relatively low level of man-made losses for all of 2020. If you added that back in, you'd probably be something closer to 105. Again, still well below our guidance. We've given the guidance for 2021 of better than 97 here. We're optimistic about the opportunities for Corporate Solutions to continue to write profitable business and be supported, frankly, by a strong industry move on the continued price increases into 2021. Can we go to the next page? The reserve adequacy restored, I think, is the summary line we should think about. This 4% increase was actually demonstrated over the course of the year. There was actually very little real volatility in those reserves. As I said, positive releases for the full year compared to the last three years, where we felt the need to reinforce reserves based on new information that came to us in those years. There was more than CHF 120 million of gross expense reduction in CorSo with the pruning of the portfolio and the elimination of certain lines of business. We've redeployed a little bit of that in some important new investments. Overall, the expense ratio moved down by an entire, actually, two full percentage points in spite of the fact that our premiums decreased year-over-year. Lastly, not quite as dramatic as some of the things we're doing in the reinsurance side on differentiated assets, but the International LEAD program up by 50% year- on- year in terms of the volumes that we're able to book with clients that are benefiting from our global capabilities, which continue to be enhanced with the expansion of the technology that we're deploying there. That's Corporate Solutions. If I can go to Life Capital. Here, this will be the last time that we report Life Capital as a business unit. We'll continue to provide information on iptiQ business, the significant remaining business was part of Life Capital. With the sale of ReAssure, the relative scale and scope of the activities here did not warrant that it was put at the same level of Corporate Solutions and the reinsurance businesses. Here what you see on net income, a loss, part of this is the new business strain of iptiQ, which will continue. We've flagged this in the investor day that we would expect iptiQ new business strain as it continues its very strong growth to be about $50 million a quarter. We also took the opportunity as we finalized elipsLife inside Life Capital before moving it over in 2021 to our Corporate Solutions business to do a very strong analysis of the group's activities and reserving positions. We've done some important restructuring, including a withdrawal from the U.S. initiative that had been started, which we deemed to be probably not part of the future for elipsLife, a refocus on the European franchise and a strengthening of the overall reserve positions to be sure that we're in good shape as we move forward with that. I think the most important figure on this page is the $1.5 billion dividend. We were successful not only in closing the ReAssure sale, but of moving the capital up to the group. In 2020, you undoubtedly remember that we continued to own a significant share position in Phoenix Group. They're the buyer of ReAssure. That itself has turned out to be a fine investment for us. On the open books here, overall, the growth of 25%. If I move to the next page for iptiQ specifically, you see gross premiums written in 2020 grew by 76%, up to $370 million. The in-force policy count increasing by a similar amount. The average policy size continues to be pretty stable in that period. We've added another metric, which we started disclosing in Investor Day, gross income. This is a number which is utilized by some of the newer players in the insurance space, technology-driven players like iptiQ, that have demonstrated the same level of, or at a similar level at least, of strong growth based on platform technologies. Here, we'll continue to show this number as we continue to grow the book. One of the reasons we've been successful in increasing the premiums written has been the expansion of distribution partners, a continued diversification across geographies, but also partners. Up by more than 1/3 from 29 - 40 during the course of the year. If we move on, we've got next our group investments. Christian mentioned the quality of the result, the relative defensive positioning that we had during most of the year, and frankly, even in Q4, where we maintained some hedges on the observation that political situations in a couple of major countries continued to be volatile in the fourth quarter. While some people might have been expecting a little stronger fourth quarter investment return, that was dampened somewhat by these hedges. I think in hindsight, we were very comfortable with the caution that we had in place. We enter the year with a very, very strong portfolio, 3.5% return on investment. The positioning that you see here with Reassure excluded, showing a little bit of an increase on some of the credit investments from 35.6 - 39 a modest reduction in the government bond portfolio. Still, I think anyone looking at this in the industry would view this as a fairly conservative positioning on risk on the investment side. The one piece which is unambiguous with the current interest rates, even if we've seen some positive movement towards the end of last year and the first quarter of this year, the running yield is down, and down significantly from where it had been over the previous four years. That means as we reinvest the portfolio, we're not getting quite the same returns and just reiterates the need for continued price improvements in our P&C businesses and continued innovation in the structuring of some of our life and health contracts. Christian did mention the losses from impairments of $27 million. Just a stellar performance as the team moved early and aggressively out of sectors which were under threat during the course of the year and remain arguably under some threat as we go into 2021. On the next page, a slide which we showed, I think Guido had also at the Investor Day, but just to reiterate, the largest single bucket for our bond portfolio has these long durations of more than 10 years. Overall, CHF 82 billion of fixed income with CHF 7 billion of unrealized gains. That number actually increased during the course of the year. 70% of that fixed income has more than 10 years of maturity. We're comfortable that we've well-positioned with a conservative risk profile on this. We are taking some advantage of improving financial markets and some of the hedges that had been in place certainly in the middle of the year were reduced towards the end of the year, and we continue to manage dynamically that risk position. As we go into 2021, we don't expect any bad surprises out of the asset side, and we think there's opportunities as interest rates start to slowly come off their lows of potentially finding opportunities for a little more risk-taking as needed. I think, Elena, that's the last slide that I have. We've got more slides in the appendix, but we weren't intending to go through them. We'll go straight to the Q&A, and I turn it back to Elena to help manage that. Thank you very much, John and Christian. We will now start the Q&A session. A reminder to everyone that if you would like to ask a question, you will need to dial into the conference call. If you are following our media conference on our website, you should be able to see the dial-in numbers now on the screen. Operator, could we take the first question, please? Anyone who has a question may press star and one at this time. The first question comes from the line of Philippe Rey with L'Agefi. Please go ahead, sir. Hello. Good morning. Can you hear me? Yes, we can. Hello. Okay. I have a question about P&C business. You are continuing to increase the pricing, to improve the pricing. Are you determined to focus on margins and so to rein in some volume growth throughout all the business cycles? It is a key point, in my opinion. Elena, I think I take that. Yes, please. I think obviously what we do is we have this economic framework where we try to value the business at the frontline as it comes in. There's usually general directions we give from the top on where to go, and the Chief Underwriting Office is involved in that. The decisions, day in, day out, must be taken at the front because everything happens at the same time. We don't steer the volume. We don't say you have to grow or shrink. We just give general directions as I showed on the slide around price quality, the kind of combined ratio we'd like to achieve, the economic profit we need to have. There's an outcome out of all of that, which will vary from year- to- year. Sometimes people will find opportunities and there's volume attached to that, sometimes not. I think the hardest bit to understand is probably that there's a large distribution, in every line of business in terms of profitability. It's not just one value. When you see things moving up five points, distribution is much wider than that. Every year we need to take a decision of how much we write and also whether some of these marginal businesses in or out. The result this year clearly was the push for profitability, and lower interest rates also, which made some of this above 100% combined ratio business not bearable anymore, led to this shrinkage. We're not making any particular predictions for the next three years. Thank you. Can we take the next question, please? The next question comes from the line of Paul Walsh with The Insurer. Please go ahead. Good morning. Can you hear me? Yes, we can. Yes. Lovely. Thank you. Couple of questions from me, please. Based upon our experiences in 2020, have you had to sort of change your approach to risk modeling and correlations in light of your experiences in the past year? Last, secondly, on the subject of negative rates, are you prepared for negative rates, and what do you think the impact of those might be? Thank you. Yeah. In terms of experience, the risk modeling, I think every pandemic, every Nat Cat, every event, since we have our own proprietary model, we will look into what does it mean, because you usually learn more. The uncertainty of all these models is probably higher than people generally think. This is not different. I think we had pandemic in our models for 15, 20 years, we knew they happen. The reality has turned out a little bit different. It was less bad on the mortality side. Why? Because in contrast to historical events, there was a much, much stronger reaction. Obviously, other than historical events, sometimes people would isolate, and we know that from the Middle Ages. This was an extreme reaction, certainly compared to 1918, of locking down everything. That means the loss has shifted more to the P&C side, to areas that were maybe not expected. Everything on the left side was expected. If anything, it was on the low end. On the P&C side, I think there's clear learnings for event cancellation business, which in my view will be very expensive in the future because people realize it's all correlated to this pandemic event. Either it will exclude pandemic in the future or it will be very expensive. I think on the whole business interruption side, I think there's going to be, or there is happening a big cleanup of language to clarify what is covered, what is not covered, because a lot of what has been covered now was unintended. It was language that was meant to cover small local outbreaks of something. You had the full diversification across the world, but not a global pandemic. It will be a combination of reaction on the language side, exposure side, which is probably going to be much bigger. Then modeling changes will probably follow that. In the end, modeling changes might not be as important because the realities have simply changed significantly. To your second question, negative rates. We price every business based on whatever yields curve we have. It's a discounted view of premiums, discounted view of claims coming in. Whatever rates you have, you just have to adapt. In clear terms, that means the LIBOR rates go down as they did now, you need a higher price to compensate for that. If you can't achieve the higher price, we cannot write the business. This is how we see the business for more than 15 years. If you want the absolute rate level doesn't really matter. What matters is more, does the whole market recognize that? Do they all see it the same way, and therefore do the prices react? They do to a certain extent, obviously, not always perfect, but they do. Thank you. Just to follow up quickly on your first point you mentioned there, you talk about event cancellation insurance. Do you foresee that becoming sort of very expensive in the future because of the experiences we've had in 2020? Could you just clarify that, please? Yes. This is the question of correlation. If event cancellation was only covering local problems, that means you can write a lot of those and the premiums will diversify across the world. That was probably the assumption of the whole market in the past, which is why it was not that expensive. If in the future people say they want everything covered, all the pandemics, basically, every person who writes that needs to add these covers up in the pandemic scenario. It becomes a very capital-heavy product. I would foresee one of two things, either pandemic will not be covered, global pandemics will not be covered, and then it can remain the price range it was probably, or you include it, and it will become much more expensive. At the moment, I cannot say. This would be a prediction, because at the moment, obviously, nobody's organizing anything, and nobody needs insurance for it. As we opened up, I think this is going to be an issue. Lovely. Thank you very much. Let's take the next question, please. The next question comes from the line of Ben Dyson with S&P Global Market Intelligence. Please go ahead. Oh, hi. Good morning. Just a couple of questions for you, if I may. Just on the 11% reduction in volume at the renewal, though, I'm apologies if you already covered this, but just interested in what that says about what could happen at future renewal dates in 2021 and what that will mean for your top line in 2021 as well, or whether the cutbacks you made there have got rid of that particular problem area of business, and there's no residual business in there. The second one was, I think, Christian, you mentioned that you're hoping to be in a position to deploy capital given improvements in P&C Re and CorSo. I'll just be interested in where you might deploy that capital. What choices you seem to do that? Thank you. I think it's important to say that the numbers this year, the business that was renewed now, the way it gets into the GAAP numbers is always a mixture of the part of the current renewal that we will earn this year and the second half of what we wrote last year that will be earned this year. It comes in a time-delayed way, you have a certain smoothing, I would say, over the years. Of course, we have some multi-year deal that deliver premium but are not in the renewals, we have other renewals as we go through the year. You shouldn't take any particular prediction on volumes for 2021 from this renewal. There's many factors that can influence that. This said, I think it very much depends on market development, interest rates development, how the rest of the market goes from here. Again, we're not steering the company based on volumes. This is more an output parameter. We try to steer the company based on economic profit we generate in the renewals. I think on a high level, I can probably say that, yes, there were some specific areas we wanted to reduce, and I don't foresee this to be the key focus in years from now, because we did the work we wanted to do at this stage. Again, I cannot predict or say anything about future renewals. On the capital deployment, that's our general policy, and I think it makes sense. Whenever we see opportunities, we can deploy that. It very much depends where it materializes, where prices go up, whether some clients need our help, whether there's M&A activity, and they want some large transactions and capital really from us. All I'm saying is we have the capital, and we can grab opportunities if they arose during the year. That is the third priority in our capital management framework. Again, here, I cannot predict if and when this would happen. Okay. Thanks very much. Thank you. Let's take the next question, please. The next question comes from the line of Mark Hofmann with AWP. Please go ahead. Yes, hello. My question goes to Corporate Solutions. Could you give a bit more color of the plans with Corporate Solutions, where you stand in terms of the restructuring measures, and what are the next steps? Are you planning to grow the business again? Yeah, happy to do that. Obviously the first priority had to be the whole restructuring. As we had Andreas Berger come in at the beginning of 2019, a lot of work has happened. On the pruning side, we're nearly finished. There's maybe 5% left or so at this stage. This is done. On the cost side, everything is done, announced. It will come through the accounts with a bit of time delay, but that's all done. The rest is really disciplined underwriting and trying, obviously, as we capture some of the profitable growth we can see. At this stage, this is just a balancing out with all the business we have cut. To me, the first priority is really to get this back on track until next year. Underneath that, we still invest in a few directions, which I talked about in the investor days towards the end of the year. I think we need to position also it shouldn't be a me too corporate insurance, because it would suffer a lot in the next soft cycle. We have time to also reposition it, to make it more solutions-oriented, to bring it closer to the client with the primary layer business. There's some digital solutions that are being developed within Corporate Solutions, we want to make sure that Corporate Solutions is also the gate for the whole Swiss Re group towards the corporate clients, which can also profit from solutions developed in reinsurance or from, for example, iptiQ. The vast majority of the troops must be focused on the quality and on improving the situations. As I said, I'm very pleased about that. You're right. This is not the end. This is just phase I. Thank you. Thank you. Let's take the next question, please. As a reminder, if you wish to register for a question, please press star and one on your telephone. Star followed by one. The next question comes from the line of David Owen with The Insurer. Please go ahead. Okay. Yes, hello. We can hear you. Hello. Can you hear me? Yes, we can. Go ahead. Okay, thank you. I just wanted to ask, you said last year that you had an exposure of $250 million to Tokyo 2020. Has that claim now materialized, and have you paid it out in full? Thank you very much. John? Yes. We typically don't speak to the specific covers or events. What I can say is, the current status is we expect the Olympics to occur in 2021. The maximum exposure that we would have remaining is the $250 that we referenced last year, minus whatever we've set aside already this year. I think overall, with event cancellation, what you've seen is a little bit of agility by the organizers. As we speak, the Australian Open is going on right now, when by comparison, last summer Wimbledon was completely canceled and an insurance loss for the industry. Overall, we hope for the athletes first, for the city of Tokyo, for Japan, that the Olympics do take place. If they don't take place, we will manage through whatever losses would come through, but the maximum, as you correctly pointed out that we had flagged last year, was $250 million for Swiss Re. Let's take the next question, please. The next question comes from the line of Maximilian Volz with Versicherungswirtschaft. Please go ahead. Hello, sir. I have a question about the climate risk. Your risk models improve, but at the same time, the climate risks increase. What are the effects for your core business, the reinsurance? Thank you. Yeah, happy to take that. We have obviously a whole series of climate scientists and natural catastrophe scientists who follow the science that is developed everywhere around the world. The scientific consensus at this stage is that you have increasing Nat Cat load, but most of that or a big part of that is due to urbanization and increasing values in dangerous areas. The climate effect is believed to be seen and visible in what they call the so-called secondary perils. The ones that are typically not huge for us, like wildfires, hail, floods, et cetera. Less so or there's just no consensus yet whether and how much climate change has changed hurricane frequency and severity. The effect at this stage are seen mostly in these smaller perils, which have an impact on our business, and that's where we adapted our models, but it has an impact on our business, because traditionally, these were not very big. The sophistication level of our modeling is not or was not high enough. They fall into these so-called aggregate covers, where clients just add up all losses they have throughout the year, and then buy a protection on this. We've reduced that exposure a little bit. On the rest, like windstorms in Europe or hurricanes in the U.S., we remain just very close to the science and see how it evolves and what things emerge. A lot of these phenomena, when you simulate them, are just over a longer period of time. There's not a massive increase from one year to the next. It's just things that come in and this overlapping effect of bigger cyclical phenomena or climate phenomena that we can observe in the world. It's not a straight thing. It's rather complicated. Yeah, overall, we will be exposed, but the big mitigant here is that every year we choose to participate or not. We don't write contracts that bind us on a 30-year period, and if it deteriorates, if the trend is very negative, we pay out. That's not how it works. It's every year we can reassess the risk, and we take it or not. We can adapt pricing to that. What it means in the end is the climate trend risk is borne by society, not by the insurance industry. Thank you. Thank you. Let's take the next question, please. The next question comes from the line of Andreas Kohli with SRF. Please go ahead, sir. Andreas, hello? Yes, hello. This is Andreas speaking. Yes, we're hearing you, so you can ask the question now. Yes. Could you once again state what you expect this year regarding COVID claims and reserves? Can you hear me? Yes, we can. Oh, sorry. Okay. Yeah. John, you want to do that? You have to get off mute. Apologies. Happy to. On the slide deck on page six, we actually had the buckets listed out for you. Across the P&C businesses of P&C Re Corporate Solutions, our best estimate is that we will be at less than $500 million of losses in property casualty, split between the event cancellation, the business interruption, credit and surety and other lines. The more difficult calculation is frankly on mortality, where this unfortunately is going to be a function of actual deaths in 2021 that are driven by the pandemic. Here we put the calculation in place to say, for every 100,000 U.S. excess deaths, we're likely to take a charge of about $200 million in the Life & Health Re business. You might ask why this is so focused on the U.S. The reality is, with one or two exceptions, most of life insurance don't cover mortality risk for seniors past retirement age. That exposure just doesn't exist in countries like Italy or France, where there have been deaths, but the mortality dimension of insurance is not relevant. The savings function's very relevant still. The industry has been behaving appropriately as a result of that. I think you can make your own judgments about how many excess deaths are likely to occur in 2021. Obviously, the first quarter started off very badly. It seems to be improving. If you look at the daily counts, they are reducing in the U.S. The rollout of the vaccine simply needs to gain traction, and we need to see the reduction, first in caseloads, then in hospitalizations, and finally in deaths. Thank you very much. May I just ask again to Mr. Mumenthaler, what makes you so optimistic for this year, given the fact that the COVID mutations might change the game again and again? I think there's different factors. One is we can all have different views of how the virus will spread. Overall, we watch Israel very closely, who are far ahead of most of us in vaccinations. We can see that hospitalizations of the elderly go down very drastically, or the new cases go down very drastically. There's definitely hope on that front. Even if it was worse, there's some backstops here, which I explained. On the event cancellation, for example, the number of business outstanding is just very limited. There have been no new policies since last year. In CorSo, we stopped writing it a while ago. On the business interruption front, we are nearly through basically changing the wordings vis-a-vis our clients that this is not included. Although there's a significant mitigant in place for actually the largest bucket of losses that came through last year. Then obviously mortality will do whatever mortality does. I have a strong feeling that with these two waves we have seen, we already had a lot of people touched by the virus. If you add the vaccine, I'm not saying it's going to go down to zero. I think the COVID-19 will become endemic. It's going to become a virus that will be part of all of us, and we might need new vaccines once a year. It will adapt, and it will be more like a flu type or influenza type virus for the human race. Thanks. Thank you. Let's take the next question, please. The last question comes to the line of Ian Smith with Financial Times. Please go ahead. Hello, Ian. Can you hear us? Mr. Smith, your line is open. You may ask your question. Can you hear me? Yes, we can. Hello, Ian. Thank you very much. I think Murphy's Law has applied to me now. I just wanted to follow up on the Tokyo Olympics, where you've said whatever you'd be on the hook for would be $250 million minus what you set aside this year. Can you give us any guidance as to how much you did set aside this year? I suppose my other question's on the interest rate environment. We've seen a bit of a backup in yield since the start of the year as inflation expectations rise. If that continues through 2021, how will that change the overall picture of group profitability? Yes. Happy to respond. On the Tokyo Olympics, we've not revealed what we've actually reserved in 2020. I'm afraid I can't help you with that specific exposure. We have paid more than $800 million for event cancellation around the world. As I said, our expectations right now, our best estimate of pre-tax losses in 2021 are less than $200 million. We also make clear that we do expect that some of the larger sporting events, especially those in the second half of the year, should be able to take place, even if without spectators. With respect to interest rates, you're right. We have seen some movements up. You're also correct in suggesting that that might be linked with increasing expectations of inflation as we go forward. What I can say is we would welcome a reversion to more normal interest rates. At the moment, as Christian said, our business is priced with the existing rates. That was true on January 1st and will be true during the course of this year. We don't anticipate in our own pricing a reversion to the mean, and if we find this improvement, that will assist us. I don't think it should reverse any of the price improvements that we've seen, especially on the U.S. casualty book. We think those are needed and directionally correct, but not necessarily all what's required of the actual loss profile. With respect to inflation, long-term increased inflation is not necessarily good for our business. It's one of the reasons why we've adjusted some of the parameters in our SST calculations. When we release our January 1 number next month in March, it will demonstrate that we've taken a more conservative view of what inflation might look like on a going forward basis, and that will have increased capital requirement for those longer tail lines. Maybe, John, I could add that the mechanics are such that if yields increase, if interest rates increase, you have several phenomena. One is that the SST goes up, so we have a high capitalization, which is essential for business taking. At the same time, in GAAP, the equity goes down because it's not mark-to-market view. The ROE goes up, but you have the same capability of writing business, because what counts there is the SST. The other effect is more a psychological effect you have in the market is that people or a lot of clients look at it nominally, not in insurance, but in CorSo. Even if you get the same rate, the economic value of it is higher because of higher interest rates. It's just psychologically usually more easy to go this way than when interest rates go down and people have to pay a higher price, even though economically, you're on a standstill. I would say rising interest rates generally are positive for these reasons for Swiss Re. All right. Thank you very much. It seems that we do not have any further questions on the line. I would like to thank everyone for joining today's results media conference and wish you a great day.