Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2
Munchener Ruckversicherungs-gesellschaft — Munich Re — Investor Presentation (June 2010)
23 slides from Munchener Ruckversicherungs-gesellschaft's investor presentation, Jun 29, 2010
Slide 1: SystemAgro – The Basis for Sustainable Risk Management in Agriculture
SYSTEMAGRO ‒ THE BASIS FOR SUSTAINABLE RISK MANAGEMENT IN AGRICULTURE Thomas Blunck Karl Murr Munich, 29 June 2010
Slide 2: Challenges in agriculture make risk management more important than ever
Challenges in agriculture make risk management more important than ever Food and energy Agriculture Natural hazards Finance and and climate change investments Press briefing, SystemAgro 29.6.2010 2
Slide 3: Climate is changing
Climate is changing Rise in globally averaged temperature Globally averaged temperature 1850 – 2009 Deviation in temperature from the mean from 1961-1990 2009: + 0.44 °C above the annual mean 1961-1990 (14 °C). Press briefing, SystemAgro 29.6.2010 3
Slide 4: More extremes in a warmer climate
More extremes in a warmer climate Increase in mean value Increase in mean value and variance More Much heat more heat Temporary climate Temporary climate Much more More extreme extreme heat Less cold heat Minor New change New climate climate Cold Medium Hot Cold Medium Hot Source: P. Hupfer, Naturwi
Slide 5: Number of natural catastrophes worldwide 1980–2009
Number of natural catastrophes worldwide 1980 – 2009 Upward trend 500% Geophysical events 450% Storm events Hydrological events 400% Temperature extremes and others Linear (Geophysical events) 350% Linear (Storm events) Linear (Hydrological events) 300% Linear (Temperature extremes and others) 250%
Slide 6: Weather catastrophes worldwide 1980–2009: Losses are increasing
Weather catastrophes worldwide 1980 – 2009 Losses are increasing 300 Weather-related natural perils in agriculture 250 Dry spells, heat waves, shortage of 200 water Floods, heavy rain, hail 150 Shift in growth periods, frost 100 ÆSevere weather-related events are already numerous – with upward tr
Slide 7: Expected change in summer temperature and dry spells
Expected change in summer temperature and dry spells Temperature change (June – August) Longer dry spells (Southern and Central Europe) (Number of days with < 0.5 mm precipitation) Ç8 T 6 4 2003 x 2 0 -2 1900 1950 2000 2050 2100 Deviation from mean temperature Example Italy: Dry spells up to 20 days
Slide 8: Heat wave and drought 2003 in Europe: Effects on agriculture
Heat wave and drought 2003 in Europe Effects on agriculture Financial impact (in euros) Austria 197 million Spain 810 million Germany 1500 million France 4000 million Italy 4-5000 million Influence on production: difference in relation to the average (in %) Poultry Potatoes Maize Wheat Dry fodder So
Slide 9: SystemAgro – Added value for all stakeholders in agriculture
SYSTEMAGRO ‒‒ ADDED VALUE FOR ALL STAKEHOLDERS IN AGRICULTURE
Slide 10: Climate change makes risk management in agriculture more important
Climate change makes risk management in agriculture more important Transfer [insurance, hedge] Reserves [assets, saving] Adjustment [breeding / biotechnology, farming methods] Avoidance [farming in accordance with the location, farming under contract, etc.] Risks (yield, market, politics) Press brie
Slide 11: Insuring climate change risks is fundamental to the agricultural value chain
Insuring the risks from climate change is fundamental to the agricultural value chain Risk management State and climate change Seed, fertilizer, manu- • Guaranteed sales facturers of agricultural • Increase in product benefit / PPP Crop insurance system equipment innovation Agricultural value chain
Slide 12: Risk management that prepares farmers for the future
Risk management that prepares farmers for the future Conventional Environmental Risk management safeguards changes in SystemAgro Diversification through Fewer main crops: less Growing demand for risk mixture of crops diversification transfer Hail insurance Climate change State-aided crop
Slide 13: Changing agricultural policy
Changing agricultural policy European agricul- Challenges and GAP 2013: Crop tural policy today goals insurance stimuli Mistakes in past market and Enlargement and Direct payments partly price policy have been specialization of the used to finance crop corrected operations failures Competiti
Slide 14: Reasons behind the need for government involvement
Reasons behind the need for government involvement Type of risk Type of production P Political objectives Risk sensitivity: Degree of self-sufficiency Production cannot be entire regions may be Socio-economics: promotion relocated affected of rural areas Open-air production High frequenc
Slide 15: Effective multi-peril crop insurance as a public-private partnership
Effective multi-peril crop insurance as a public-private partnership Sustainable … for all stakeholders in the agricultural production chain Tailored … to each farmer's individual risk Open for all farmers … to ensure liquidity for equipment and investments Transparent … for all parties Press briefi
Slide 16: Insurance premium co-financed by the state
Insurance premium co-financed by the state Objectives Measures Background Make the insurance Premium is co-financed by Risk-adequate premium for premium affordable to the government agricultural insurance is farmers Budget defined by law for very high: around 10% of Farmers obtain sufficie
Slide 17: Catastrophe losses co-financed by the state
Catastrophe losses co-financed by the state Objectives Measures Background No ad-hoc payments by Clear definition of the Extreme losses with a loss government following a amount of loss above which ratio of around 300% have a catastrophe the state shares in the return period of 10-20 years L
Slide 18: Open for all farmers
Open for all farmers Objectives Measures Background All farmers can basically Premium subsidies are High penetration of the purchase insurance cover coupled to other agricultural market means high This means that all farmers policy measures premium volume can obtain financial aid from This
Slide 19: Importance of SystemAgro for farmers
Importance of SystemAgro for farmers Financial security and planning security Farmers Expectations to be met by the farmers: Good professional practice and management of the business Agricultural risk management Risk deductible reflecting normal fluctuations in income Advantages for the farmer
Slide 20: Role of agricultural insurers in SystemAgro
Role of agricultural insurers in SystemAgro Existing infrastructure and know-how Agricultural insurers Role of insurers: Assessment of the risks to be covered and of the losses Development of policies and calculation of rates Prompt payment of claims Administration and claims settlement Ma
Slide 21: SystemAgro: Duties and advantages for the state
SystemAgro: Duties and advantages for the state Clear budgeting and management of agricultural policy goals State Duties: Definition of the statutory framework and implementation of SystemAgro as a risk management tool in agricultural policy Co-financing of insurance premiums within the defined
Slide 22: SystemAgro – 35 years of experience on 200 million hectares worldwide
SystemAgro Æ 35 years of experience On 200 million hectares worldwide today Individually and reliably mitigates the risk due to natural hazards for all farmers Reduces farmers' income volatility, offers protection against the risk of ruin and consequently improves their creditworthiness as well
Slide 23: Any questions? Thank you for your attention!
ANY QUESTIONS? www.munichre.com/systemagro THANK YOU FOR YOUR ATTENTION! © 2010 Münchener Rückversicherungs-Gesellschaft © 2010 Munich Reinsurance Company