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Rating Action:

Moody’s rates Swiss Re’s EMTN program; assigns (P)A2 senior unsecured programme rating to Swiss Re Ltd.

12 May 2020

London , May 12, 2020 -- Moody's Investors Service, ("Moody's") has today assigned foreign and local currency (P)A2 Euro Medium Term Note (EMTN) senior unsecured programme ratings to Swiss Re Ltd. ("SRL") and affirmed the foreign currency (P)Aa3 EMTN senior unsecured programme rating of Swiss Reinsurance Company Ltd ("SRZ "). In the same action, which follows the update of Swiss Re's $10 billion EMTN programme, Moody's assigned local and foreign currency (P)A2 senior unsecured programme ratings to new issuer, Swiss Re Finance (UK) Plc ("SRFUK"), and affirmed the SRZ-backed foreign currency senior unsecured programme rating of Swiss Re Finance (Luxembourg) S.A. ("SRFL") at (P)Aa3 and the SRZ-backed local currency senior unsecured programme rating of Swiss Re Treasury (US) Corporation ("SRTUS") at (P)Aa3. The outlook for all issuers is stable.

Ratings on potential individual notes issued under the programme will be subject to Moody's review of the terms and conditions of the notes.

A full list of all rating actions can be found at the end of this press release.

RATINGS RATIONALE

--SWISS RE LTD.

SRL is the listed holding company for the Swiss Re Group ("Swiss Re" or "the Group") and parent of the Group's three primary operating groups, SRZ (Aa3, stable); Swiss Re Corporate Solutions Ltd (Aa3, stable) and Swiss Re Life Capital Ltd.

SRL's (P)A2 senior unsecured program rating is based on Moody's standard notching for insurance holding companies of groups domiciled in locations with enhanced regulatory supervision at a group-wide level and is rated two-notches below the Aa3 Insurance Financial Strength (IFS) rating of SRZ, the Group's lead reinsurance operating entity.

With respect to Swiss domiciled insurers, Moody's considers that the Swiss Financial Market Supervisory Authority (FINMA) is one of the regulators that oversees an enhanced regulatory regime including Group-wide capital requirements and participation in supervisory colleges.

In June 2015, Switzerland was officially granted Solvency II third-country equivalency. As a result, the EU considers Switzerland's insurance regulation standards for commercial insurers to be equivalent to their own. Moody's also considers Solvency II to provide enhanced group supervision.

In addition, SRL benefits from meaningful diversification of its capital base and revenues, with significant life and non-life insurance and reinsurance operations in a number of countries and fungibility of capital across the Group, which further supports the notching for SRL's rating.

--SENIOR UNSECURED LONG-TERM AND SHORT-TERM RATINGS

The programme includes senior unsecured obligations to be issued by both SRZ and SRL, as well as by the three related finance companies, SRFL, SRFUK and SRTUS. Senior unsecured debt – of any tenor and including short-term instruments - issued by SRFL, SRFUK or SRTUS benefit from irrevocable and unconditional guarantees from either SRZ and/or SRL and ranks pari-passu with other unsubordinated obligations of the respective guarantors.

Instruments issued under the programme for SRFL and SRTUS will benefit from a guarantee from either SRL or SRZ, while SRFUK takedowns are only guaranteed by SRL.

Moody's notes that long-term senior unsecured debt issued, or guaranteed, by SRZ is rated at the same level as SRZ's Aa3 IFS rating, reflecting the pari-passu ranking of policyholder and senior debt obligations of reinsurance operating companies in Switzerland. Long-term senior unsecured debt issued, or guaranteed, by SRL is rated at A2, two-notches below SRZ's IFS rating and in line with Moody's standard notching for holding companies of groups domiciled in locations with enhanced regulatory supervision at a group-wide level.

--DATED AND UNDATED SUBORDINATED DEBT

Similar to the senior unsecured debt instruments, the programme includes dated and undated subordinated debt instruments to be issued by both SRZ and SRL, as well as by two related finance companies, SRFL and SRFUK. Dated and undated subordinated debt issued by SRFL benefit from an irrevocable subordinated guarantee from either SRL or SRZ, and an irrevocable subordinated guarantee from SRL only for such instruments issued by SRFUK.

The dated subordinate instruments rank junior to senior debt instruments but are senior to the undated subordinated debt, with the junior (undated) instruments ranking only above the Group's equity instruments. In line with Moody's methodology for insurance company instrument ratings, junior subordinated debt is rated at the same level as subordinate debt, in the absence of meaningful triggers that if breached result in a variation of payment through mandatory coupon suspension. Moody's does not consider the solvency-based triggers for mandatory coupon suspension to be meaningful in this case, and therefore the dated and undated subordinated programmes are rated at the same level – (P)A2 for those issued or guaranteed by SRZ and (P)A3 for those issued or guaranteed by SRL.

The terms of the dated and undated subordinated instruments allow the issuers to defer interest payments on any interest payment date if no distribution or share repurchase on any class of share of the parent (SRL), or junior or parity securities issued by entities in the group, was declared or paid during the previous 6-month period. The instruments also contain a mandatory interest deferral trigger based upon breach of regulatory capital requirements for SRL or SRZ, and other customary solvency related triggers. However, any deferred interest payment, optional or mandatory, will constitute arrears of interest and remain due by the issuer at a future date (cumulative coupon skip mechanism), with payment subject to regulatory approval.

Dated and undated instruments are not subject to principle deferral conditions, except that repayment or redemption is subject to solvency requirements being met and approval by the Group's regulator, FINMA.

The dated and undated subordinated instruments are intended to qualify as regulatory capital under the Swiss insurance solvency regulations, and their hybrid features could result in some equity credit under Moody's debt equity continuum based on the terms of each specific issuance.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Moody's says that the EMTN programme and instrument ratings are notched down from SRZ's IFS rating, and therefore any change in SRZ's IFS rating would be reflected in SRZ, SRL, SRFL, SRFUK or SRTUS' EMTN programme ratings.

The following factors could place upward pressure on SRZ's IFS rating: (i) increased diversification of earnings streams resulting in lower potential earnings volatility, (ii) sustained strong core earnings with return on capital above 10% over the underwriting cycle, while maintaining very strong capital adequacy, (iii) financial and total leverage consistently below 20%, with earnings coverage over 10x through the cycle, and (iv) material improvement in the business environment, including Property and Casualty reinsurance pricing and interest rates.

Conversely, the following factors could place downward pressure on SRZ's ratings: (i) higher than expected life or non-life reinsurance claims related to coronavirus that erode capital; (ii) return on capital remaining below 6% - absent the expected coronavirus-related impacts – over the next 12 to 18 months; (iii) meaningful and sustained adverse reserve development; (iv) increase in the Group's risk appetite, including for higher net catastrophe exposure or asset risk; (v) reduction in shareholders' equity of greater than 10% over a rolling 12 month period due to weak underwriting results or excess return of capital to investors.

LIST OF AFFECTED RATINGS

Swiss Re Ltd.

Assignments:

…Senior unsecured MTN program (Local Currency), assigned (P)A2

…Senior unsecured MTN program (Foreign Currency), assigned (P)A2

…Subordinated MTN program (Local Currency), assigned (P)A3

…Subordinated MTN program (Foreign Currency), assigned (P)A3

…Junior Subordinated MTN program (Local Currency), assigned (P)A3

…Junior Subordinated MTN program (Foreign Currency), assigned (P)A3

…Other Short Term (Local Currency), assigned (P)P-1

…Other Short Term (Foreign Currency), assigned (P)P-1

Outlook Action:

Outlook assigned Stable

Swiss Reinsurance Company Ltd

Assignments:

…Senior unsecured MTN program (Local Currency), assigned (P)Aa3

…Subordinated MTN program (Local Currency), assigned (P)A2

…Junior Subordinated MTN program (Local Currency), assigned (P)A2

…Junior Subordinated MTN program (Foreign Currency), assigned (P)A2

…Other Short Term (Local Currency), assigned (P)P-1

Affirmations:

…Senior unsecured MTN program (Foreign Currency), affirmed (P)Aa3

…Subordinated MTN program (Foreign Currency), affirmed (P)A2

…Other Short Term (Foreign Currency), affirmed (P)P-1

Outlook Action:

Outlook remains Stable

Swiss Re Treasury (US) Corporation

Assignments:

…Backed Senior unsecured MTN program (Local Currency), assigned (P)A2 (Guaranteed by Swiss Re Ltd.)

…Backed Senior unsecured MTN program (Foreign Currency), assigned (P)A2 (Guaranteed by Swiss Re Ltd.)

…Backed Other Short Term (Local Currency), assigned (P)P-1 (Guaranteed by Swiss Re Ltd.)

…Backed Other Short Term (Foreign Currency), assigned (P)P-1 (Guaranteed by Swiss Re Ltd.)

…Backed Senior unsecured MTN program (Foreign Currency), assigned (P)Aa3 (Guaranteed by Swiss Reinsurance Company Ltd)

…Backed Other Short Term (Foreign Currency), assigned (P)P-1 (Guaranteed by Swiss Reinsurance Company Ltd)

Affirmations:

…Backed Senior unsecured MTN program (Local Currency), affirmed (P)Aa3 (Guaranteed by Swiss Reinsurance Company Ltd)

…Backed Other Short Term (Local Currency), affirmed (P)P-1 (Guaranteed by Swiss Reinsurance Company Ltd)

Outlook Action:

Outlook remains Stable

Swiss Re Finance (Luxembourg) S.A.

Assignments:

…Backed Senior unsecured MTN program (Local Currency), assigned (P)A2 (Guaranteed by Swiss Re Ltd.)

…Backed Senior unsecured MTN program (Foreign Currency), assigned (P)A2 (Guaranteed by Swiss Re Ltd.)

…Backed Subordinated MTN program (Local Currency), assigned (P)A3 (Guaranteed by Swiss Re Ltd.)

…Backed Subordinated MTN program (Foreign Currency), assigned (P)A3 (Guaranteed by Swiss Re Ltd.)

…Backed Junior Subordinated MTN program (Local Currency), assigned (P)A3 (Guaranteed by Swiss Re Ltd.)

…Backed Junior Subordinated MTN program (Foreign Currency), assigned (P)A3 (Guaranteed by Swiss Re Ltd.)

…Backed Other Short Term (Local Currency), assigned (P)P-1 (Guaranteed by Swiss Re Ltd.)

…Backed Other Short Term (Foreign Currency), assigned (P)P-1 (Guaranteed by Swiss Re Ltd.)

…Backed Senior unsecured MTN program (Local Currency), assigned (P)Aa3 (Guaranteed by Swiss Reinsurance Company Ltd)

…Backed Subordinated MTN program (Local Currency), assigned (P)A2 (Guaranteed by Swiss Reinsurance Company Ltd)

…Backed Junior Subordinated MTN program (Local Currency), assigned (P)A2 (Guaranteed by Swiss Reinsurance Company Ltd)

…Backed Junior Subordinated MTN program (Foreign Currency), assigned (P)A2 (Guaranteed by Swiss Reinsurance Company Ltd)

…Backed Other Short Term (Local Currency), assigned (P)P-1 (Guaranteed by Swiss Reinsurance Company Ltd)

Affirmations:

…Backed Senior unsecured MTN program (Foreign Currency), affirmed (P)Aa3 (Guaranteed by Swiss Reinsurance Company Ltd)

…Backed Subordinated MTN program (Foreign Currency), affirmed (P)A2 (Guaranteed by Swiss Reinsurance Company Ltd)

…Backed Other Short Term (Foreign Currency), affirmed (P)P-1 (Guaranteed by Swiss Reinsurance Company Ltd)

Outlook Action:

Outlook remains Stable

Swiss Re Finance (UK) Plc

Assignments:

…Backed Senior unsecured MTN program (Local Currency), assigned (P)A2 (Guaranteed by Swiss Re Ltd.)

…Backed Senior unsecured MTN program (Foreign Currency), assigned (P)A2 (Guaranteed by Swiss Re Ltd.)

…Backed Subordinated MTN program (Local Currency), assigned (P)A3 (Guaranteed by Swiss Re Ltd.)

…Backed Subordinated MTN program (Foreign Currency), assigned (P)A3 (Guaranteed by Swiss Re Ltd.)

…Backed Junior Subordinated MTN program (Local Currency), assigned (P)A3 (Guaranteed by Swiss Re Ltd.)

…Backed Junior Subordinated MTN program (Foreign Currency), assigned (P)A3 (Guaranteed by Swiss Re Ltd.

…Backed Other Short Term (Local Currency), assigned (P)P-1 (Guaranteed by Swiss Re Ltd.)

…Backed Other Short Term (Foreign Currency), assigned (P)P-1 (Guaranteed by Swiss Re Ltd.)

Outlook Action:

Outlook assigned Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Reinsurers Methodology published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1187551 . Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004 .

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569 .

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Dominic Simpson
VP-Sr Credit Officer
Financial Institutions Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London
United Kingdom
JOURNALISTS : 44 20 7772 5456
Client Service : 44 20 7772 5454

Antonello Aquino
Associate Managing Director
Financial Institutions Group
JOURNALISTS : 44 20 7772 5456
Client Service : 44 20 7772 5454

Releasing Office :
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London, E14 5FA
United Kingdom
JOURNALISTS : 44 20 7772 5456
Client Service : 44 20 7772 5454

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