Swiss Re seeks shareholder approval to be fully compliant with new Swiss governance regulation ahead of schedule
18 March 2014, Zurich
- The Board of Directors proposes a 10% increase in ordinary dividend to CHF 3.85 per share and an additional special dividend of CHF 4.15 per share
- Amendments proposed to Swiss Re's Articles of Association to fully reflect and comply with the new "Ordinance Against Excessive Compensation at Public Corporations"
- Susan L. Wagner proposed as new member of the Board of Directors
- 2013 EVM income of USD 6.3 billion, economic net worth USD 37.2 billion
At Swiss Re's upcoming Annual General Meeting (AGM) on 11 April 2014, the Board of Directors proposes an ordinary dividend of CHF 3.85 per share and an additional special dividend of CHF 4.15 per share. As Swiss Re aims to be fully compliant with the Swiss federal "Ordinance Against Excessive Compensation at Public Corporations" ahead of schedule, the Board proposes to make all necessary amendments to Swiss Re's Articles of Association already in 2014. The Board of Directors further proposes the election of Susan L. Wagner as a new independent member. As of today, shareholders also have access to Swiss Re's 2013 Annual Report "Open minds connecting generations" and the Economic Value Management (EVM) 2013 report.
Based on Swiss Re's very strong 2013 performance, the Board of Directors proposes to increase the ordinary dividend to CHF 3.85 per share, up from last year's CHF 3.50 per share. In addition, a special dividend of CHF 4.15 per share is proposed. If approved by shareholders at the Annual General Meeting, the dividends will be paid out on 22 April 2014. This planned return of approximately USD 3.1 billion in capital to shareholders reflects the Group's excellent capital base and its strong capital position.
Swiss Re Chairman Walter B. Kielholz says: "We followed a clear capital management policy over the past few years: growing our regular dividend in line with long-term earnings was our highest priority, followed by business growth where it meets our profitability targets. As a result, Swiss Re has returned more than half of the net income to shareholders each year since 2009. If the dividend proposals are approved by the AGM in 2014, the payout ratio as a percentage of net income will increase to 71% from 66% in 2013."
Compliance with new regulation
Corresponding to best corporate governance standards, the Board of Directors proposes to be fully compliant with the "Ordinance Against Excessive Compensation at Public Corporations" (the Ordinance) ahead of mandated implementation dates. As a consequence, Swiss Re has decided to put forward all necessary changes to its Articles of Association at the AGM on 11 April 2014.
Election of Board members
The Ordinance provides for an annual and individual election of members of the Board of Directors and of the Chairman of the Board of Directors by the Shareholders' Meeting.
The Board of Directors proposes Walter B. Kielholz to be re-elected to the Board and at the same time be elected as Chairman of the Board for a one-year term of office until the next ordinary Shareholder's Meeting.
At the AGM on 11 April 2014, the Board of Directors further proposes to re-elect the following members:
- Raymund Breu
- Mathis Cabiallavetta
- Raymond K.F. Ch'ien
- Renato Fassbind
- Mary Francis
- Rajna Gibson Brandon
- C. Robert Henrikson
- Hans Ulrich Maerki
- Carlos E. Represas
- Jean-Pierre Roth
Current Directors Jakob Baer and Malcolm D. Knight will not stand for re-election due to reaching retirement age. Also, John R. Coomber has decided to step down from the Board of Directors after 41 years of service to Swiss Re in various functions, including CEO from 2003-2005. Swiss Re thanks the outgoing Board members for their valuable and long-standing contribution over the past years.
As a new, non-executive and independent member, the Board of Directors nominates Susan L. Wagner. She has a strong track record in global finance positions and brings solid management and corporate experience to Swiss Re's Board of Directors.
A detailed CV can be found here.
Under the new regulation, the members of the Board's Compensation Committee are also elected separately. Swiss Re's Board of Directors proposes the following Directors to be elected as members of the Compensation Committee:
- Renato Fassbind
- C. Robert Henrikson
- Hans Ulrich Maerki
- Carlos E. Represas
"Say on pay" regime at Swiss Re
The Ordinance requires shareholders to vote annually, separately and with binding effect on the aggregate amounts of compensation of the members of the Board of Directors and the Group Executive Committee. The Board of Directors proposes in the amendments to the Articles of Association a "say on pay" regime that allows Swiss Re's shareholders to cast a differential vote:
- Shareholders will be asked to approve the maximum aggregate amount of compensation of the Board of Directors for the upcoming term of office, which corresponds to the period between the present and the next AGM.
- With regard to Group Executive Committee compensation, shareholder approval will be split into two separate votes:
- Shareholders will be asked to approve the maximum aggregate amount of fixed compensation and the maximum aggregate amount of long-term compensation elements of the Group Executive Committee for the following financial year.
- The aggregate amount of short-term compensation elements of the Group Executive Committee will be subject to a vote that relates to the preceding completed financial year.
The first binding shareholder vote on compensation of both, the Board of Directors and the Group Executive Committee, will be held at the Annual General Meeting in 2015.
For the voting process on the proposed agenda items, Swiss Re will use for the second time an online platform where shareholders can register and provide voting instructions electronically.
Publication of the 2013 Annual Report
Today, Swiss Re publishes its 2013 Annual Report "Open minds connecting generations", consisting of the Business Report and the Financial Report, including audited financial statements. The report is available online and can be downloaded from www.swissre.com/investors/financial_information/
For the holders of debt instruments issued by Swiss Reinsurance Company Ltd, Swiss Re also publishes today the Swiss Reinsurance Company Ltd's Consolidated 2013 Annual Report in English containing Swiss Reinsurance Company Ltd's audited annual consolidated financial statements and audited annual statutory financial statements for 2013. The full report is available online and can be downloaded from www.swissre.com/investors/financial_information/
Group EVM income at USD 6.3 billion in 2013
In 2013, Swiss Re generated an Economic Value Management (EVM) income of USD 6.3 billion. After taking into account capital costs and other adjustments, EVM profit for 2013 amounted to USD 4.0 billion, compared to the USD 4.2 billion profit in 2012.
As of 31 December 2013, Economic net worth (ENW) increased to USD 37.2 billion, up from USD 33.9 billion as of 31 December 2012. Economic net worth per share was USD 108.67 compared to USD 98.87 at the end of 2012.
EVM is Swiss Re's proprietary framework for measuring economic value creation on a market consistent basis, with an explicit recognition of capital costs. Swiss Re adopted the EVM framework in 2003 and uses it to steer business and strategic financial decisions and in setting the Group's variable compensation.
The 2013 EVM results are released together with the full Annual Report 2013 and can be downloaded from www.swissre.com/investors/financial_information/
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The Swiss Re Group is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. Dealing direct and working through brokers, its global client base consists of insurance companies, mid-to-large-sized corporations and public sector clients. From standard products to tailor-made coverage across all lines of business, Swiss Re deploys its capital strength, expertise and innovation power to enable the risk-taking upon which enterprise and progress in society depend. Founded in Zurich, Switzerland, in 1863, Swiss Re serves clients through a network of over 60 offices globally and is rated "AA-" by Standard & Poor's, "Aa3" by Moody's and "A+" by A.M. Best. Registered shares in the Swiss Re Group holding company, Swiss Re Ltd, are listed on the SIX Swiss Exchange and trade under the symbol SREN. For more information about Swiss Re Group, please visit: www.swissre.com or follow us on Twitter @SwissRe.
Cautionary note on forward-looking statements
Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets, and trends) 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”, “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 of operations, financial condition, solvency ratios, liquidity position or prospects to be materially different from any future results of operations, financial condition, solvency ratios, liquidity position or prospects expressed or implied by such statements or cause Swiss Re to not achieve its published targets. Such factors include, among others:
- instability affecting the global financial system and developments related thereto;
- deterioration in global economic conditions;
- 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 due to actual or perceived deterioration of Swiss Re’s financial strength or otherwise;
- 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 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;
- possible inability to realise amounts on sales of securities on Swiss Re’s balance sheet equivalent to their 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;
- the possibility that Swiss Re’s hedging arrangements may not be effective;
- the lowering or loss of one of the financial strength or other ratings of one or more Swiss Re companies, and developments adversely affecting Swiss Re’s ability to achieve improved ratings;
- the cyclicality of the reinsurance industry;
- uncertainties in estimating reserves;
- uncertainties in estimating future claims for purposes of financial reporting, particularly with respect to large natural catastrophes, as significant uncertainties may be involved in estimating losses from such events and preliminary estimates may be subject to change as new information becomes available;
- the frequency, severity and development of insured claim events;
- acts of terrorism and acts of war;
- mortality, morbidity and longevity experience;
- policy renewal and lapse rates;
- 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 the interpretation of legislation or regulations;
- legal actions or regulatory investigations or actions, including those in respect of industry requirements or business conduct rules of general applicability;
- changes in accounting standards;
- significant investments, acquisitions or dispositions, and any delays, unexpected costs or other issues experienced in connection with any such transactions;
- changing levels of competition; and
- operational factors, including the efficacy of risk management and other internal procedures in managing the foregoing risks.
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.
This communication is not intended to be a recommendation to buy, sell or hold securities and does not constitute an offer for the sale of, or the solicitation of an offer to buy, securities in any jurisdiction, including the United States. Any such offer will only be made by means of a prospectus or offering memorandum, and in compliance with applicable securities laws.
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