Swiss Re says it presented investors with plans to execute on its strategy to deliver its 2011-2015 financial targets by reducing debt, optimizing profits and increasing productivity.
The company also laid out plans to improve the profitability of its Life and Health Reinsurance business.
Swiss Re says its capital management priorities are to grow the regular dividend and allocate capital to support profitable business opportunities.
To maximize return on equity (ROE), Swiss Re plans to reduce debt by more than $4 billion by 2016. As part of this effort, a Swiss Re subsidiary launched a tender offer to repurchase three tranches of its senior debt.
By 2015, Swiss Re says it expects costs savings of $250-$300 million, which will then be redeployed across the company to areas which offer attractive financial returns. One example is the move into high-growth markets, where Swiss Re expects to use the proceeds of its cost savings efforts to finance a shift of personnel and resources into these markets.
In asset management, Swiss Re will continue with its previously announced rebalancing efforts, with a prudent move toward high-quality corporate debt and a reduction in government bonds.
In its L&H Reinsurance business, the company says it is meeting or exceeding profit expectations. The exception is the Individual U.S. Life business written prior to 2004. Swiss Re says it has identified the steps required to improve the performance of this business and these actions are already underway.
By 2015, L&H Reinsurance expects to generate ROEs of 10-12 percent. The company says actions it soon plans to take to improve profitability will temporarily reduce L&H Reinsurance US GAAP earnings in 2014 by approximately $500 million before tax.
Swiss Re says it has established a Life & Health Business Management division that will focus on the active management of the in-force portfolio.
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