Climate Change and R iReinsuranceNomura's European Sustainable and Responsible Investment ConferenceParis, 17 March 2011

Swiss Re at a glance

Swiss Re is a leading and highly diversified global (re)insurance company.(re)insurance company.

147 years of experience in providing wholesale re/insurance and risk management solutions.

We deliver both traditional and innovative offerings in Property & Casualty and Life & Health that meet our clients’ needs.

management solutions.

A pioneer in insurance-based capital market solutions, we combine financial strength and unparalleled expertise for the benefit of our clients.

Our financial strength is currently rated:Standard & Poor’s: A+/positive; Moody’s A1/stable; A.M. Best: A/positive

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W bl i k ki h iWe enable risk-taking that is essential to enterprise and progress

Examples

W id if d Cli h id ifi d i i kWe identify andevaluate risks

Climate change identified as emerging risk almost 20 years ago

We select andtake risks

Insurance of mostindustrial risks

We transfer andtrade risks

Securitisation of earthquake and hurricane risks

We educate and consult on risks

Over 50 risk-related publications during the last 12 months

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L ki i i k hi kiLooking at emerging risks means thinking beyond the materiality bubble …..

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ESG risks may become material very soon.

Long term themes:Developments in emerging markets:

Emerging risks:

t l d

clean energy• rising incomes, • changing eating habits –

more meat consumption • rapid urbanization,

• natural resources under pressure – clean air, water, agricultural soil

• increasing dependence

water

rapid urbanization, • improving lifestyles,• digitization, • increasing domestic

d d f d d

g pon critical resources, e.g. Rare Earth Elements (REE)

• need for better

infrastructure

demand for goods and services,

• increasing energy and power demand

• need for better infrastructure

• conversion to well diversified energy

natural resources

p• increasing greenhouse

gas emissions• increasing energy, food

and metal prices

portfolio, low carbon energy technologies

• population growth• food securityand metal prices

• increasing wish for democratic change

food security• climate adaptation• migration

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Cli h i k hi hl iClimate change risks are highly inter-connected with other macro themes

GHG emissions

Storms

Flood DroughtSea level Ecosystems

Food security

Climate Change

Health effects

I

Energy security

GHG regulation

Migration ConflictInvestments

6Slide 6

L di i i i i iLeading scientists expect a continuing rise of the global mean temperatureIPCC AR4* multi-model averages and assessed ranges A2Year 2000 constantIPCC AR4 multi model averages and assessed rangesfor surface warming**

6.0 Estimated

A1Bconcentrations

20th century B1

(o C

)

6.0

5.0

4 0

Estimated probability for man-made contribution***

e w

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• 2007 > 90% • 2001 > 66%

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1900 2000 2100

Even if we stop all emissions today, climate is still going to alter

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*AR4: IPCC Assessment Report 4 ** Base year 1990 *** Based on IPCC AR3 and AR4, published in 2001/2007 Source: IPCC

Increasing insured weather related losses

Issues:

IncreasingIncreasing…

Insurance penetration

Population densities

Economic values

Value concentration in risk prone areasin risk prone areas

Vulnerability of insured values

Hazard cycles and trends, natural & man-made climate change

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Did you notice? New Orleans is actually a flood plane…

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Cli Ch l iClimate Change strategy – translating an emerging risk into business

1Academic research and studies

Collaborations with NGO’sAssess and

i kTranslating 1 Collaborations with NGO s

Reviewer IPCC special reportmanage risk

2 Ad t ti i l tiSei e b siness

climate change

2 Adaptation insurance solutions

Sustainability investment portfolio

Seize businessopportunities

3Swiss climate delegation

WEF, Clinton Initiative, G8

Dialogue with clients employees public

Influence business environment Dialogue with clients, employees, publicenvironment

4 Greenhouse neutral since 2003Lead by l

intob i4 COyou2 subsidy programexample business

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Climate change activities

1 Assess and manage risk Economics of Climate Adaptation (ECA)1

Eight regional adaptation strategies

Diverse climate and economic development levels Diverse climate and economic development levels

Joint execution: Swiss Re's probabilistic NatCat models and McKinsey cost / benefit methodology

P bli i t t hi EU i i R k f ll Public private partnership: EU commission, Rockefeller, Standard Chartered, McKinsey, Climate Works, Swiss Re

Key results:

Significant economic value at risk:1-12(19)% of GDP by 2030 under current (high) climate

40-65% of losses can be averted cost effectively y

Insurance suited for low-frequency, high-severity events

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Economics of Climate Adaptation (ECA)

1 Assess and manage risk

Rel. impact in % of GDP is higher in low GDP countries

Annual expected losses higher in high GDP countries (e g 33bn USD in Florida)

6.1

16

18

20

total expected loss todayresidual loss 2030

1 (e.g. 33bn USD in Florida)

6.07.1 4.210

12

14

16

annual expected losses as %

cost-effectively avertible loss 2030

1.1

0.8

1.60 4

2.6

1.8

1.44.7

5.9 3.1

2.1

0.0 1.12

4

6

8of local GDP

0.4

0

2

high GDP country low GDP country

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Economics of Climate Adaptation (ECA)

1 Assess and manage risk

How can it be averted?

Measures have been ranked by cost / benefit ratio1

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Economics of Climate Adaptation (ECA)

1 Assess and manage risk

How can it be averted?

Measures have been ranked by cost / benefit ratio16

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5.605.60 6.20

Cost/benefit Example city of Hull, UK:

5

4

3

2 1 541.67

1 681.90 2.15

3.30

4.80

Measures below this line have net economic benefits

~65% of total expected loss can be averted cost-effectively

2

0950

0.25 0.280.39

0.49 0.650.77

1.54

0.01 0.131

1.68

0 1,000 1,050850 1,100 1,15030050 500 550 700 750 800 900Averted

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Clo St

A b f i i i hA number of insurance transactions in the agriculture and public sector

2 Seize businessopportunities2 pp

2010 – Vietnam: Agribank protection against loan defaults by rice farmers due to

poor harvestspoor harvests

2010 – China: Reinsured Beijing Municipal Government to cap losses from flood,

hail, windstorm, and livestock

2010 – Alabama: First parametric cover for a government in an industrialized country

2010 – Mexico: MultiCat - Funding for immediate

relief efforts after disasters

2010 – Caribbean: Parametric hurricane and earthquake cover for 16 CARICOM

countries

2009 - MultiCat Bond: Hurricane and earthquake transaction with World Bank and

Mexican government

2008 – Malawi: Drought coverage with World Bank

2004 – India: Protected Basix (MFI) from deficit rainfall (350 000 farmers insured)

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2004 India: Protected Basix (MFI) from deficit rainfall (350,000 farmers insured)

CHF 487 million in “green” investments

2 Seize businessopportunities2 pp

16

CCapital market instrumentsGrowing in importance

2 Seize businessopportunities

Total catastrophe bonds outstanding by year

USD m

2 pp

8 801

14,000

16,000

18,000 Underlying rationale for the Insurance Linked Securities (ILS) market continues to hold true

4,419

8,801

12,697 11,3869,019

8,000

10,000

12,000 Sponsor valueCollateralised, multi-year capacity from an alternative market

5,696

8,462

3 4805,017

1 812

2,2063,502

3,941

2 000

4,000

6,000

market

Investor valueDiversifying asset class with superior returns

1,125 967 9902,388

1,1432,500 2,980 3,480759 1,412 1,812

0

2,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Issued Outstanding from Previous Years

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Source: Swiss Re

M b f h ffi i l S i CliMember of the official Swiss Climate Delegation to the UNFCCC negotiations

3Influence business environment3 environment

Member of the official Swiss Climate

Delegation to the UNFCCC negotiations

Steering board members of Climate Wise,

Climate PrinciplesClimate Principles

Involved in high-level discussions, e.g. at

the World Economic Forum, Clinton Global

Initiative, UN Assembly, 10 Downing Street,

Capitol Hill, G8, US Senate and post-Kyoto

negotiationsnegotiations. We advocate a long-term, market-based

policy framework.

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Swiss Re is greenhouse neutral since 2003

4 Lead by example4 p

Greenhouse neutral since October 2003!

Goal:

Emissions reduction by 45% per employee

by the end of 2012 and to offset the restby the end of 2012 and to offset the rest

Actual:

Emission reductions by end of 2010:

51.3% - we have more reduced than offset

Swiss Re subsidizes up to CHF 5000 of

employee investments in green technologyemployee investments in green technology

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SAM sector leader

4 Lead by example4 p

Swiss Re retained its position as insurance

sector leader 2010/2011 in the Dow Jones

Sustainability Index.

Swiss was listed for the first time as one of

the World’s Most Ethical Companies for

2009 by Ethisphere, a leading international

think thank.

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Conclusions

1. Climate change will lead to an increase of nat cat losses

2 Public and private sector (infrastructure intensive industry) will

1. Climate change will lead to an increase of nat cat losses

2 Public and private sector (infrastructure intensive industry) will2. Public and private sector (infrastructure intensive industry) will have to adapt

3. Climate change and other macro trends will lead to numerous

2. Public and private sector (infrastructure intensive industry) will have to adapt

3. Climate change and other macro trends will lead to numerous gbusiness opportunities and risks, which have to be monitored carefully

S

gbusiness opportunities and risks, which have to be monitored carefully

S4. Swiss Re supports public and private sector:

• Risk dialogue with experts, information sharing

4. Swiss Re supports public and private sector:

• Risk dialogue with experts, information sharing

• Risk assessment and quantification

• Developing innovative risk transfer solutions

• Risk assessment and quantification

• Developing innovative risk transfer solutions

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Thank you

Corporate calendar & contacts

Corporate calendar

25 March 2011 Investors' Day Zurichy15 April 2011 147th Annual General Meeting Zurich 05 May 2011 First Quarter 2011 results Conference call04 August 2011 Second Quarter 2011 results Conference call03 November 2011 Third Quarter 2011 results Conference call03 November 2011 Third Quarter 2011 results Conference call09 December 2011 Investors' Day

Investor Relations contacts

Hotline E-mail+41 43 285 4444 Investor_Relations@swissre.com

Susan Holliday Ross Walker Chris Menth+44 20 7933 3890 +41 43 285 2243 +41 43 285 3878

Si Li b h Si F lSimone Lieberherr Simone Fessler+41 43 285 4190 +41 43 285 7299

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C iCautionary note on forward-looking statements

Certain statements and illustrations contained herein are forward-looking. These statements and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact. Forward-looking statements typically are identified by words or phrases such as “anticipate“, “assume“, “believe“, “continue“, “estimate“, “expect“, “foresee“, “intend“, “may increase“ and “may fluctuate“ and similar expressions or by future or conditional verbs such as “will“, “should“, “would“ and “could“. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Swiss Re’s actual results, performance, achievements or prospects tostatements involve known and unknown risks, uncertainties and other factors, which may cause Swiss Re s actual results, performance, achievements or prospects to be materially different from any future results, performance, achievements or prospects expressed or implied by such statements. Such factors include, among others:

further instability affecting the global financial system and developments related thereto;

changes in global economic conditions; Swiss Re’s ability to maintain sufficient liquidity and access to capital markets,

the lowering or loss of financial strength or other ratings of one or more of the companies in the Group or developments adversely affecting the ability to achieve improved ratings;

the cyclicality of the reinsurance industry; Swiss Re s ability to maintain sufficient liquidity and access to capital markets, including sufficient liquidity to cover potential recapture of reinsurance agreements, early calls of debt or debt-like arrangements and collateral calls under derivative contracts due to actual or perceived deterioration of Swiss Re’s financial strength;

the effect of market conditions, including the global equity and credit markets, and the level and volatility of equity prices interest rates credit spreads currency

uncertainties in estimating reserves; the frequency, severity and development of insured claim events; acts of terrorism and acts of war; mortality and morbidity experience; policy renewal and lapse rates;and the level and volatility of equity prices, interest rates, credit spreads, currency

values and other market indices, on Swiss Re’s investment assets; changes in Swiss Re’s investment result as a result of changes in its investment

policy or the changed composition of its investment assets, and the impact of the timing of any such changes relative to changes in market conditions;

uncertainties in valuing credit default swaps and other credit-related instruments;ibl i bili li l f i i S i R ’ b l

extraordinary events affecting Swiss Re’s clients and other counterparties, such as bankruptcies, liquidations and other credit-related events;

current, pending and future legislation and regulation affecting Swiss Re or its ceding companies, and regulatory or legal actions;

changes in accounting standards;i ifi t i t t i iti di iti d d l possible inability to realise amounts on sales of securities on Swiss Re’s balance

sheet equivalent to its mark-to-market values recorded for accounting purposes; the outcome of tax audits, the ability to realise tax loss carryforwards and the

ability to realise deferred tax assets (including by reason of the mix of earnings in a jurisdiction or deemed change of control), which could negatively impact future earnings;

significant investments, acquisitions or dispositions, and any delays, unexpected costs or other issues experienced in connection with any such transactions, including, in the case of acquisitions, issues arising in connection with integrating acquired operations;

changing levels of competition; and operational factors, including the efficacy of risk management and other

the possibility that hedging arrangements may not be effective;

These factors are not exhaustive. Swiss Re operates in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

internal procedures in managing the foregoing risks.

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Legal notice

©2011 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivatives of this presentation or to use it for commercial

th bli ith t th i itt i i f S i Ror other public purposes without the prior written permission of Swiss Re.

Although all the information used was taken from reliable sources, Swiss Re d t t ibilit f th h i fdoes not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial and/or consequential loss relating to this presentation.g p

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