Ladies and gentlemen, welcome to the nine months results 2022 media conference call. I'm Alice, the conference call operator. I would like to remind you that all participants will be in listen only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Elena Logutenkova, Head, Media Relations and Corporate Reporting. Please go ahead, madam. Thank you. Good morning, everyone. Thank you for joining our media call on the nine months results for 2022. I am joined today by our group CFO, John Dacey, who will give you a brief overview of the results, and then we'll take your questions. With that, John, over to you. Thank you, Elena, and good morning to everyone. The first nine months of 2022 were marked by multiple challenges, in particular, the turbulence in the financial markets, an increase in natural catastrophe claims, surging inflation, and the war in Ukraine. As a result, we reported a group net loss of $285 million for the period. The loss in the third quarter was $442 million, which we indicated with a pre-announcement two weeks ago. Nevertheless, we remain confident in our midterm outlook, particularly encouraged by several key developments. First, both life and health reinsurance and corporate solutions are performing very well and are on track to meet their targets for the year. Second, we are seeing the positive effects of rising interest rates, which are already helping to compensate for the impact of higher inflation and will be an important lever for the profitability of the group going forward. The group's recurring income yield increased to 2.4% in the first nine months of 2022, from 2.2% for the same period last year, and the trajectory is clear. In the third quarter, we achieved a 2.8% recurring yield. If we look at the fixed income reinvestment yield, it increased markedly to 4.1% in the third quarter. This translates into a year-on-year increase in the recurring contribution from our fixed income yield portfolio of around $100 million this quarter alone. Third, our capital position remained very strong, with a group SST ratio of 274% as of July 1, 2022. This enables us to capture profitable opportunities in the upcoming renewals while remaining committed to our capital management priorities. Now let me turn to the results for the individual businesses. Property and Casualty Reinsurance reported a net loss of $283 million for the first nine months of 2022, impacted by natural catastrophes and lower investment results. At $2.5 billion, large natural catastrophe claims in the period were higher than expected and mainly relate to Hurricane Ian, floods in Australia and South Africa, hailstorms in France, as well as a series of other smaller events around the world. Net premiums earned increased slightly to $16.6 billion, supported by continued price improvements. Calculated at stable foreign exchange rates, the increase of the net premiums earned amounts to 4.4%. P&C Re's normalized combined ratio was 96.2 in the period. Due to an increase in small and mid-sized claims, and driven mostly by economic inflation, the business is unlikely to reach its normalized combined ratio target of less than 94% in 2022. Turning to life and health reinsurance, the business segment reported a net income of $221 million for the first nine months of 2022. While the first quarter of 2022 was strongly impacted by COVID-19 related claims, the business returned to profitability in the second and third quarters, despite significantly lower investment results this year. Overall, COVID-19 claims for the nine-month period amounted to $608 million, with the vast majority booked in the first quarter. Net premiums earned and fee income remained largely unchanged at $11.2 billion. Calculated at stable foreign exchange rates, the increase of net premiums earned amount to +4%. Life and Health Re is on track to meet its target of approximately $300 million in net income in 2022. Now looking at Corporate Solutions, the business unit achieved a net income of $356 million in the first nine months of 2022. The continued solid results confirmed improved resilience of the underlying business and was achieved despite reserves related to the Ukraine war and large natural catastrophe losses, including Hurricane Ian. Net premiums earned increased by 4.6% to $4.1 billion, driven by new business growth in selected focused portfolios, along with continuous earn through of previously realized rate increases. Calculated at stable foreign exchange rates, the increase in net premiums earned amounts to 9.2%. Corporate Solutions' combined ratio of 93.1 for the first nine months of 2022 is well on track to reach the full year target of less than 95. Finally, let me also touch on the iptiQ results. In the first nine months of 2022, iptiQ continued its dynamic growth trajectory. Compared to the prior year period, the business increased its gross premiums written by 25% to $650 million, with growth being achieved across all regions. To sum up, while P&C Re has been impacted by elevated claims activity, all other businesses are performing well. We remain confident in the midterm outlook of the group, and we're committed to our 2024 profitability targets. Although the group targets for 2022 are unlikely to be reached. We see increased demand and risk protection around the world, and our strategy and very strong capitalization puts us in a favorable position for the upcoming renewals amid rising prices and constrained market capacity. With that, I'd like to hand it back to Elena to manage the questions. Thank you, John. We'll now open the lines for questions. Operator, could you please take the first question? Anyone who has a question may press star and one at this time. The first question comes from the line of Ben Dyson with S&P Global Market Intelligence. Please go ahead. Oh, hi, good morning. Thanks for taking my questions. Yeah. I just wanted to ask whether your catastrophe experience in the year or the quarter was gonna prompt any change in your approach to catastrophe reinsurance, given that I think Swiss Re was one of the companies that had said it was gonna continue to grow in catastrophe, where others were cutting back. Just a second question really just around Hurricane Ian specifically and whether you're expecting any development in that $1.3 billion loss figure you gave, just given that claims can develop in Florida in particular. Thanks for the question, Ben. Let me start with Ian and then I'll respond to the broader question about natural catastrophe. We believe the $1.3 billion that we've reserved in the third quarter is actually a very prudent position. We put the reserves up, given fairly limited information coming from the marketplace. The fact of the matter is the hurricane occurred on the two days before the end of the quarter, exactly one month ago from today. As a result, the actual information from our primary insurance clients was very limited. Having said that, the models that we use both to estimate our exposures and potential losses are well developed, and we feel comfortable. You alluded to the reality that in Florida in particular, there has been what is sometimes referred to as creep of losses, where uncertainty around the distinction between wind loss and flood loss and the strong intervention of lawyers in trying to increase recoveries has caused some recent storms to cost considerably more than originally identified. We think both our industry loss, which is a range between $50 billion and $65 billion, and our specific loss for Swiss Re at $1.3 billion reflects all of these factors and is likely to cover the reality that comes out over the coming quarters. With respect to the broader question on natural catastrophes, yes, we believe that this is an important part of the future of Swiss Re's business. We remain committed to providing capacity at the right price and then within the right structures to our clients. We think there are clear adjustments that need to be made in terms of the retentions. That is the skin in the game that the primary clients put for some of these positions. We're prepared to work with our clients through the renewals in 2023 to be sure that we get to an adequate sharing of risk and an adequate pricing of the risk that we assume. In general, we remain very much committed to this segment of the reinsurance market, not just in North America, but around the world. Okay, thank you very much. Thanks, Ben. Let's take the next question, please. The next question comes from the line of Mark Hoffmann with AWP. Please go ahead. Yes, good morning, John. My question goes to the January renewals first. What do you expect? You've said that you are trying also to give more capacity into the market. Do you expect in January already some more of growth and growth initiatives? Secondly, on your $700 million on the inflation side you took on the risk side. Is this mainly related to P&C and to the probably evolving costs that claims costs that you see there in the future? Sure. On your first question, I think we see a true market dislocation in the reinsurance broadly and in natural catastrophes specifically. It's clear that among other things, inflation, which I'll reference in just a moment, has increased asset values around the world, increased the amount of protection that's required by those asset owners from their primary companies and increased the amount of exposures that the primary companies would like to reinsure. It's not obvious that we will actually increase in any meaningful way our overall exposure. What we will be is a committed participant in this space as we go forward. We will work with clients that are willing to acknowledge the underlying risks and the appropriate prices. I would expect a material increase in that pricing, and I would expect a material increase in the retentions of risk by primary companies as we move forward. The economics of the reinsurance industry has been challenged over the last five years. I think it's clear to all that we would not just expect, but require better expected returns on risk. Therefore, the discussions with our clients are in some ways but are likely to leave some people unhappy with the amount of price increase that we believe is appropriate in this moment. We'll see where the January 1 renewals go, but it will be challenging, broadly speaking, and especially with respect to anything touching the Florida market, I expect. On the inflation adjustments, you picked up that since the end of last year, we've actually been systematically increasing our reserves to reflect the fact that the ultimate loss costs are going to be higher than what might have been expected in, you know, the earlier part of 2021 and even, frankly, at the beginning of 2022. This reflects a series of businesses. Clearly, it's been obvious, I think, to all observers, not just those in the insurance sector, that the replacement costs for and repair costs for Motor has increased materially. Property repairs and replacements more generally are up. The overall CPI inflation is one of the factors, but also, you know, other dimensions of economic inflation, including the wage inflations that we're starting to see in some markets are material. We're adjusting our view of what ultimate costs will be appropriately and making these adjustments in our own accounts as we go forward to stay ahead of the game. A lot of this is based on assumptions rather than actual experience, but we're comfortable that we're in good shape. This will continue to be monitored, and if further adjustments are required, we'll make them. Right now we feel very comfortable with where we are. Thank you. Thank you, Mark. Let's take next question, please. The next question comes from the line of Rico Kutscher with muula.ch. Please go ahead. Good morning, and thank you very much for having my questions. I have three small questions. The first one is looking at your equity; it's 50% down to $11.9 billion. How would you like to operate with an equity in a single-digit $ billion level? That's the first question. The second one, do you plan any capital increase? The third one is, can you evaluate a little bit about the models? SST signals everything is okay, and the reinsurance Nat Cat models also say, "Oh, sign this business." But when you look at the Nat Cat results this year with Hurricane Ian, it must be a little bit more cautious behavior for writing the business. Can you evaluate this model view a little bit more? Sure, Rico. Let me go through the questions in order. You're absolutely correct. On a U.S. GAAP reported shareholders' equity basis, we have come down to about $12 billion. The reality is this accounting framework makes adjustments on the asset side of the balance sheet. When interest rates go up, the fixed income portfolio that we have is valued lower, as a mathematical certainty. We're not concerned about that in the context of we actually match our assets and duration to our liabilities. Unfortunately, the accounting standard does not adjust the liabilities in a corresponding way, but it's precisely the economic view that is the basis both for the way we think about our business and the way that we think about, frankly, our capital position, and that's why the SST ratio is so robust. At midyear, at 274%. Since then even moving above that rate, we are very comfortable that we have the capital that we need. In fact, in the slide deck you'll see we've got a slide which indicates in the accounting regime in which we're moving to, IFRS 17 in 2024, that the shareholders' equity will have a better reflection of that economic capital, as we report, starting in January 1, 2024, with a new balance sheet that gives us the appropriate credit for matching assets and liabilities and reinforcing the fact that we don't speculate on trying to make money off of duration mismatches. We're very comfortable there. As a result of that, to your second question, a very quick answer. The answer, there's no indication or consideration of any capital raises. We've got the capital we need to actually write even more business in a very attractive marketplace. Your last question about models. I think it's important to understand that we don't have a model. We've got literally over 100 specific models for specific catastrophe exposures around the world. We constantly update these and review whether we're seeing one, any particular implications of climate change on the risks, both the frequency and severity of potential losses. Secondly, are we seeing any reason to further adjust the loss cost based on some of the inflationary impacts across the world? So, those model adjustments are continuous. I think a great example would be after the typhoons in Japan in 2018 and 2019, we saw that the impact of flooding related to the wind damage was huge and not properly modeled based on climatic realities. So we made those adjustments. We worked with our primary companies to explain to them why their reinsurance was going to be more expensive and why they needed to charge more in the primary market as well. That helped us get to a new equilibrium, which subsequently has performed very well for us. If there's something that's needed with respect to windstorm in North America, based on what we've seen out of Hurricane Ian, we'll make those adjustments. Right now, I'd say that, you know, a Category four hurricane with winds of 240 km an hour is not unknown, but it's a very big storm. The fact that this is a $50 billion+ industry loss should not be a surprise to people. It's not a surprise to us. It's a chunky loss in the quarter. It's a big loss for the year. We'll get through this and make sure that the pricing that we receive from our primary clients on a going forward basis reflects the risks appropriately. Very interesting. Thank you very much. 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. The next question comes from the line of Thomas Angerer with Finanz und Wirtschaft. Please go ahead. Yes, good morning. Equity is down to $12 billion around. You just mentioned that, per share, that's about $41 that you calculated and stated in your papers. Now, the dividend last paid was CHF 5.90. I wonder whether that your capital position allows for a further CHF 5.9 dividend next year. Yeah. We've been very clear in our capital management framework, right? The first objective is to remain a very well-capitalized company. I think we believe that's absolutely the case. Again, our point of reference is our economic capital that's correctly reflected in the SST ratio. The second is can we put that capital to work in writing new business? We see major opportunities, and so we do not feel any constraints, other than maybe some specific peak risks that will allow us to take advantage of what we think is a very attractive marketplace. The third is to increase or at least maintain the dividend. Again, on an economic basis and outlook of our businesses, where we've reconfirmed our financial targets for 2024. We don't see any reason to reevaluate the indications that maintaining that dividend would signal. At this point in time, I don't think we should consider again this US GAAP implications of the unrealized losses in our fixed income portfolio, which we do not trade to be a reason to adjust those capital initiatives as we go forward. The fact that the SST ratio is well above the top of our range, 274 compares to the range that we've put out there, 200-250, I think might lead some, frankly, to suspect that there could be additional capital moves. I don't think that is in the cards at the moment, in part because the increase in interest rates, the same increase in interest rates which has created this issue on the US GAAP reporting, has assisted the increase of our SST ratio. We don't take credit for that necessarily. We believe we are extremely well capitalized and therefore have capital flexibility. I don't think extraordinary capital returns to shareholders is likely to be in the cards. Thank you. Thank you, Thomas. Let's take next question, please. The next question comes from. Hi, morning. Just a quick one from me. I'm trying to get a better sense of your guidance for Q4 and for full year, with this unexpected Q3 loss. Is there anything you can tell us a bit more about that, whether you're still seeing claims coming in, for the hurricane season that will hit Q4? We've actually not given any specific guidance for the fourth quarter. What I can say is, on the hurricane itself, we believe that the $1.3 billion is a secure estimate of ultimate cost. Even if new information comes in from clients during the course of this quarter, we think our reservations that were done in Q3 of the $1.3 billion are adequate to cover any subsequent notifications that come through. I can't predict that there'll be no further hurricanes, although we're pretty close to the end of the season. There are other natural catastrophes around the world which might or might not come through. We do have a budget where we expect some losses in the Nat cat field. At the moment, that's a robust number of more than half of a billion dollars of expected losses. If those losses incur, then we're fine. If they're smaller than that, we're better than fine. If they're bigger, then we'll work through that the same way that we've worked through other quarters. Right now, there's no indication of any major losses through the first month of the fourth quarter. Okay, thank you. Thanks, Maria. Let's take next question, please. The next question comes from the line of Jonas Tauber with Versicherungsmonitor. Please go ahead. Yes. Good morning. For me on Ian, or just the net catastrophe losses, I didn't see how it's like divided on the different net cats. So the $2.7 billion for the first nine months, could you give how much is Ian right now and the other catastrophes and how much came additional in the third quarter? That would be great. Then maybe on the German auto insurance market for me, do you have any expectation how much prices have to rise in this sector for your clients? That'd be great. Thanks. Yeah. As you say, overall, we've listed $2.5 billion of losses coming through. By far, Ian, the major event there. In addition, there are major floods in Australia in the first quarter, which now for us are an event of over $400 million. There were major storm losses, including hail losses in France in June, another big loss flooding in South Africa, some February storms in Europe, including Northern Europe and Germany. You go through the list and in decreasing size. I think our view is a lot of this is our business. We expect significant losses. It's just the totality of this year has created an outsized loss, which, for the avoidance of doubt, remains at $2.5 billion below the premiums that we've received for our Nat Cat portfolio. Depending on what happens in the fourth quarter, we'll see what the ultimate combined ratio is for Nat Cat. But at the moment, it, while it's higher than expected, it's lower than the premiums that came in the door to cover these losses. We'll sort it out at the full year where we are. But I think, again, this is our business. We will have years like this where it's higher than expected. We'll have years like 2021, where it's actually lower than expected. With respect to the German auto market, this is a market like pretty much all motor markets in the world, where the claims cost has risen higher than any expectation when policies were written. I think you'll have to speak to the primary companies in your market to understand their expectations for how far they need to adjust their premium rates to get to a new equilibrium that reflects the cost of repair and the cost of replacement. This is exactly what we've addressed when we say that we've made adjustments on a global basis of $700 million for inflation. These businesses which are just going to be more expensive to deliver the benefit of insurance to clients. We expect these to be reflected also in the premiums of the primary companies, but certainly in the reinsurance costs that they pay us on a going-forward basis. We've made material increases. Acknowledged at the July 1 renewals that our prices were up 12%, but our expected costs were up 12% as well. And that gives you an indication the magnitude of some of these inflationary adjustments that are required. Thank you very much. Thank you. Thank you. Let's take next question, please. Once again, to ask your questions, please press star and one on your telephone. Star followed by one. We have a follow-up from Mr. Dyson with S&P Global Market Intelligence. Please go ahead. Hi. Yeah, thanks for taking the follow-up. Just a quick one really on the January 1 renewals. I was just wondering if, yeah, you mentioned that prices would have to go up and that some cedants might be unhappy with the level of increases. Just wondering if you could give any indication of what types of increases you're expecting or, you know, what sort of order of magnitude you're expecting there. Then just as another quick one as well. There have been reports from some of my colleagues elsewhere in the press that the Boeing 737 MAX claims have moved out because of any significant increase in the liability portion of that claim. I was wondering if you could say what Swiss Re's exposure to that is? On the first question with respect to January 1 renewals, I think it's important to understand that what we see in the marketplace, which includes, you know, not just fatigue, but frustration from third-party capital and the ILS marketplace, which includes all pre-announced or pre-Ian-announced reduction of capacity by a number of reinsurance participants in the U.S., what I mentioned earlier, which is an increase in asset values broadly and an increase in demand from the primary companies to get cover for large events, means that we have a disequilibrium, a classic supply-demand imbalance in January 1. My expectation is prices will not show some sort of an evolutionary adjustment, but rather a fairly radical adjustment up to reflect the risk that is being transferred on these tail events. We think we have a good view of what an appropriate price is, and we are in discussions with the clients to make sure that they understand increased loss cost expectations, but also the margins that we would expect to be on top of that, as we go into 2023. With respect to your second question, we can't comment specifically on any corporate loss. I can say that the aviation industry insurance and reinsurance for all risks is also in disequilibrium based on the magnitude of losses which seem to be coming through. We'll sort out what this might mean for future exposures and future prices. Okay, thank you very much. Thanks. Let's take next question, please. There are no more questions at this time. All right. Thank you very much everyone for joining the call today. If you have any further questions, please reach out to Media Relations. Thank you. Goodbye. Thank you. Goodbye. Ladies and gentlemen, the conference is now over. 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