45 slides from Munchener Ruckversicherungs-gesellschaft's earnings presentation, Nov 7, 2018
Slide 1: Quarterly report as at 30 September 2018
Image: Getty Images/Oaltindag Quarterly report as at 30 September 2018 7 November 2018 Jörg Schneider
Slide 2: Agenda
Agenda 2 13 1 Munich Re (Group) 3 Reinsurance 7 17 2 ERGO 4 Outlook 19 5 Backup Quarterly report as at 30 September 2018 2
Slide 3: Munich Re (Group) – Financial highlights
Munich Re (Group) – Financial highlights 9M result slightly above €2bn – Well on track to meet annual guidance Munich Re (Group) Q3 2018 (9M 2018) Net result Technical result €m Investment result €m Net result €m €483m (9M: €2,038m) 2,436 5,629 2,038 Strong ERGO result, also benefitting 4,865 from o
Slide 4: Munich Re (Group) – Capitalisation
Munich Re (Group) – Capitalisation IFRS capital position Equity €m Capitalisation €bn Equity 31.12.2017 28,198 Change Q3 0.4 Consolidated result 2,038 483 4.2 0.3 0.3 0.3 0.3 Changes 2.8 2.8 2.5 2.5 Dividend –1,286 0 Unrealised gains/losses –1,535 –168 Exchange rates 225 29 Share buy-backs –617 –200
Slide 5: Munich Re (Group) – Investment portfolio
Munich Re (Group) – Investment portfolio Investment portfolio Investment portfolio1 % Portfolio management in Q3 Land and buildings Fixed-interest securities Land and buildings: Increase due to 4.3 (3.4) 53.9 (54.9) updated market values Miscellaneous2 Reallocations within government bond 6.6 (6
Slide 6: Munich Re (Group) – Investment result
Munich Re (Group) – Investment result Investment result Investment result (€m) Q2 2018 Return1 Q3 2018 Return1 9M 2018 Return1 9M 2017 Return1 Regular income 1,836 3.2% 1,598 2.8% 4,927 2.8% 4,881 2.8% Write-ups/write-downs –140 –0.2% –219 –0.4% –475 –0.3% –160 –0.1% Disposal gains/losses 282 0.5% 4
Slide 7: ERGO
ERGO Quarterly report as at 30 September 2018 7
Slide 8: ERGO Life and Health Germany
ERGO ERGO Life and Health Germany Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2017 6,865 2018 2017 Q3: Improvement mainly driven by a Foreign exchange –6 Technical result 530 250 280 one-off effect due to changed profit share assumptions (after-tax effect ~€170m)
Slide 9: ERGO Property-casualty Germany (1)
ERGO ERGO Property-casualty Germany (1) Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2017 2,619 2018 2017 9M: Combined ratio of 95.3% on track for Foreign exchange 0 Technical result 129 122 7 annual guidance of ~96% Divestments/investments 0 Benign claims develo
Slide 10: ERGO Property-casualty Germany (2)
ERGO ERGO Property-casualty Germany (2) Combined ratio % Gross premiums written 9M 2018 €m Loss ratio Expense ratio Other Motor 2016 97.0 357 589 61.9 35.1 2017 97.5 64.1 33.5 9M 2018 95.3 62.7 32.6 Q3 2018 94.7 63.4 31.4 Legal protection TOTAL Fire/property 318 €2,699m 499 100.0 99.1 98.1 100.3
Slide 11: ERGO International
ERGO ERGO International Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2017 3,750 2018 2017 9M: Positive development driven by Foreign exchange –49 Technical result 221 121 100 Poland, Belgium (Life) and Health business Divestments/investments –48 9M: Combined rati
Slide 12: ERGO International – Property-casualty, including Health
ERGO ERGO International – Property-casualty, including Health1 Combined ratio % Gross premiums written 9M 2018 €m Loss ratio Expense ratio Other Poland 315 1,046 2016 98.0 64.9 33.1 Turkey TOTAL Spain 2017 95.3 63.7 31.6 105 €2,741m 600 9M 2018 94.7 62.2 32.5 Greece Legal protection 182 494 Q3 2
Slide 13: Reinsurance
Reinsurance Quarterly report as at 30 September 2018 13
Slide 14: Reinsurance Life and Health
Reinsurance Reinsurance Life and Health Gross premiums written €m Major result drivers €m 9M 9M Technical result incl. fee income of €419m 9M 2017 10,246 2018 2017 9M: In aggregate, favourable claims Foreign exchange –412 Technical result 363 232 131 experience, especially in the US Divestments/
Slide 15: Reinsurance Property-casualty
Reinsurance Reinsurance Property-casualty Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2017 13,524 2018 2017 9M: Benefit from low major losses in Q1 Foreign exchange –825 Technical result 1,193 –1,381 2,574 Q3: Significant nat cat losses (esp. Jebi, Divestments/i
Slide 16: Combined ratio
Reinsurance Combined ratio Combined ratio % Basic losses Major losses Expenses 2016 95.7 54.2 9.1 32.4 160.9 2017 114.1 54.8 25.8 33.5 9M 2018 97.3 54.8 9.3 33.3 Q3 2018 100.7 55.3 12.5 33.0 Major Reserve Normalised 101.9 100.7 losses Nat cat Man-made releases1 combined ratio2 103.9 102.0 9M 2
Slide 17: Outlook
Outlook Quarterly report as at 30 September 2018 17
Slide 18: Outlook 2018
Outlook 2018 GROUP REINSURANCE ERGO Gross premiums written Gross premiums written Gross premiums written €48–49bn ~€31bn €17–18bn (prev. €46–49bn) (prev. €29–31bn) Net result Net result Net result €2.1–2.5bn €1.8–2.2bn >€350m (prev. €250–300m) Return on P-C L/H technical result P-C combined ratio in
Slide 19: Backup
Backup Quarterly report as at 30 September 2018 19
Slide 20: Premium development
Backup: Munich Re (Group) Premium development Gross premiums written €m Segmental breakdown 9M 2018 €m Reinsurance ERGO 9M 2017 37,004 Property-casualty Life and Health Germany 15,701 (42%) ( 16.1%) 6,911 (19%) ( 0.7%) Foreign exchange –1,293 ERGO Divestments/ TOTAL 0 Property-casualty Germany inv
Slide 21: Reconciliation of operating result with net result
Backup: Munich Re (Group) Reconciliation of operating result with net result Reconciliation of operating result with net result €m 9M 2018 Q3 2018 Operating result 3,321 1,040 Other non-operating result –616 –272 Goodwill impairments –6 –6 Net finance costs –146 –45 Taxes –514 –235 Net result 2,038
Slide 22: Actual vs. analysts’ consensus
Backup: Munich Re (Group) Actual vs. analysts’ consensus Operating result – Actual vs. analysts’ consensus1 €m Major developments in Q3 2018 Q3 2018 Consensus Delta Reinsurance Life and Health Technical result, incl. fee income: €88m; Reinsurance Life and Health 204 173 31 RoI: 3.4% Reinsurance Prop
Slide 23: Development of combined ratio
Backup: Reinsurance Development of combined ratio Combined ratio vs. basic losses % Combined ratio Basic loss ratio 160.9 88.4 99.8 92.5 101.9 97.1 93.9 103.9 88.6 102.0 100.7 78.6 36.8 54.0 56.2 55.3 51.1 55.1 54.4 54.1 55.6 53.2 55.7 55.3 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3
Slide 24: Breakdown of regular income
Backup: Investments Breakdown of regular income Investment result – Regular income (€m) Q3 2018 9M 2018 9M 2017 Change Afs fixed-interest 727 2,139 2,224 –85 Afs non-fixed-interest 100 515 499 16 Derivatives 40 107 83 24 Loans 474 1,417 1,451 –33 Real estate 121 362 311 50 Deposits retained on assum
Slide 25: Breakdown of write-ups/write-downs
Backup: Investments Breakdown of write-ups/write-downs Investment result – Write-ups/write-downs (€m) Q3 2018 9M 2018 9M 2017 Change Afs fixed-interest 0 –3 –5 2 Afs non-fixed-interest –151 –314 –72 –241 Loans 0 –2 1 –3 Real estate 14 –30 –99 70 Deposits retained on assumed reinsurance and other inv
Slide 26: Breakdown of net result from disposals
Backup: Investments Breakdown of net result from disposals Investment result – Net result from disposal of investments (€m) Q3 2018 9M 2018 9M 2017 Change Afs fixed-interest 15 261 307 –47 Afs non-fixed-interest 88 434 702 –268 Loans 0 192 720 –529 Real estate 0 43 6 37 Deposits retained on assumed
Slide 27: Return on investment by asset class and segment
Backup: Investments Return on investment by asset class and segment 9M 2018 %1 Regular income Write-ups/-downs Disposal result Extraord. derivative result Other inc./exp. RoI ᴓ Market value (€m) Afs fixed-income 2.3 0.0 0.3 0.0 0.0 2.6 124,872 Afs non-fixed-income 4.0 –2.4 3.3 0.0 0.0 4.9 17,304 Der
Slide 28: Investment result by segment
Backup: Investments Investment result by segment Reinsurance Life and Health (€m) Q3 2018 Return1 9M 2018 Return1 9M 2017 Return1 Regular income 184 2.9% 560 2.9% 579 2.9% Write-ups/write-downs –15 –0.2% –41 –0.2% –10 –0.1% Disposal gains/losses 32 0.5% 230 1.2% 125 0.6% Derivatives2 33 0.5% 24 0.1%
Slide 29: Investment result by segment
Backup: Investments Investment result by segment ERGO Life and Health Germany (€m) Q3 2018 Return1 9M 2018 Return1 9M 2017 Return1 Regular income 850 2.8% 2,649 2.9% 2,643 2.9% Write-ups/write-downs –64 –0.2% –164 –0.2% –85 –0.1% Disposal gains/losses 28 0.1% 368 0.4% 1,147 1.3% Derivatives2,3 –89 –
Slide 30: Investment result by segment
Backup: Investments Investment result by segment ERGO International (€m) Q3 2018 Return1 9M 2018 Return1 9M 2017 Return1 Regular income 102 2.4% 292 2.2% 300 2.3% Write-ups/write-downs 2 0.0% –17 –0.1% –5 0.0% Disposal gains/losses –56 –1.3% –4 0.0% 46 0.4% Derivatives2 –12 –0.3% –10 –0.1% –56 –0.4%
Slide 31: Investment portfolio
Backup: Investments Investment portfolio Fixed-interest securities and miscellaneous Investment portfolio % Fixed-interest securities1 % Miscellaneous Fixed-interest securities Structured products Governments/ 6.6 (6.2) 53.9 (54.9) 3 (3) Semi-government 63 (64) Corporates TOTAL 18 (17) TOTAL €231bn
Slide 32: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Total Fixed-income portfolio % Bank bonds Governments/ 2 (2) Semi-government 53 (54) Structured products 2 (2) Loans to policyholders/ mortgage loans TOTAL 4 (3) €196bn Cash/other 4 (4) Corporate bonds 12 (11) Pfandbriefe/covered bonds 23 (23) Approximation
Slide 33: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Total Rating structure % Regional breakdown % NR AAA Without With Total 5 (5) 43 (43) policyholder participation 30.9.2018 31.12.2017 <B Germany 4.9 23.4 28.3 28.3 0 (0) TOTAL AA US 12.8 1.4 14.2 14.5 BB €195.8bn 24 (24) France 2.4 5.5 7.8 8.0 3 (3) UK 2.6
Slide 34: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Governments/semi-government Rating structure % Regional breakdown % <B AAA Without With Total 0 (0) 43 (44) policyholder participation 30.9.2018 31.12.2017 BB Germany 3.8 21.9 25.6 25.6 2 (2) TOTAL US 14.6 1.0 15.6 16.1 BBB €104.6bn Supranationals 1.3 6.0 7
Slide 35: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Pfandbriefe/covered bonds Rating structure % Regional breakdown % NR AAA 30.9.2018 31.12.2017 1 (1) 75 (74) Germany 37.4 37.1 France 19.4 20.0 BBB UK 8.4 8.6 0 (1) TOTAL Netherlands 8.0 8.0 Sweden 6.1 6.1 A €44.2bn Norway 5.9 5.9 4 (4) Spain 2.0 2.1 Italy 1
Slide 36: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Corporate bonds (excluding bank bonds) Rating structure % Regional breakdown % NR AAA 30.9.2018 31.12.2017 1 (0) 1 (1) Utilities 15.6 16.5 <BB Industrial goods and services 14.1 13.6 2 (1) TOTAL AA Oil and gas 11.5 11.1 BB €23.9bn 4 (5) 12 (12) Financial se
Slide 37: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Bank bonds Rating structure % Regional breakdown % Total NR Senior bonds Subordinated Loss-bearing 30.9.2018 31.12.2017 0 (2) US 35.9 6.9 0.7 43.5 39.2 Germany 5.5 1.2 4.5 11.2 20.7 <BB UK 7.6 0.5 0.4 8.4 7.3 1 (0) TOTAL AA Ireland 8.1 0.2 0.0 8.3 7.7 Canad
Slide 38: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Structured products Structured products portfolio (at market values): Breakdown by rating and region % Rating Region AAA AA A BBB <BBB NR USA + RoW Europe Total Market-to-par ABS Consumer-related ABS1 188 107 42 27 0 0 218 145 363 100% Corporate-related ABS
Slide 39: Sensitivities to interest rates, spreads and equity markets
Backup: Investments Sensitivities to interest rates, spreads and equity markets Sensitivity to risk-free interest rates – basis points –50 –25 +50 +100 Change in gross market value (€bn) +7.7 +3.8 –7.1 –13.5 Change in on-balance-sheet reserves, net (€bn)1 +1.7 +0.9 –1.6 –3.1 Change in off-balance-sh
Slide 40: On- and off-balance-sheet reserves (gross)
Backup: Investments On- and off-balance-sheet reserves (gross) €m 31.12.2016 31.12.2017 30.6.2018 30.9.2018 in Q3 Market value of investments 238,490 231,885 231,150 231,271 121 Total reserves 28,496 25,395 22,382 22,389 7 On-balance-sheet reserves Fixed-interest securities 8,649 7,622 5,955 4,903
Slide 41: On- and off-balance-sheet reserves
Backup: Investments On- and off-balance-sheet reserves €m On-balance-sheet reserves Off-balance-sheet reserves1 Total reserves (gross) 8,068 14,321 Provision for deferred premium refunds –3,801 –8,199 Deferred tax –763 –1,849 Minority interests –3 0 Consolidation and currency effects –203 0 Sharehol
Slide 42: Changes to shares in circulation
Backup: Shareholder information Changes to shares in circulation Acquisition of Retirement of Weighted average number of shares in circulation Shares 31.12. own shares in own shares in 30.9. (millions) (millions) 2017 9M 2018 9M 2018 2018 Shares in 160.0 circulation 151.3 –3.4 – 147.9 154.1 149.3 14
Slide 43: Financial calendar
Backup: Shareholder information Financial calendar 2019 6 FEBRUARY Preliminary key figures 2018 and renewals Balance sheet press conference for 2018 financial statements 20 MARCH Analysts' call 30 APRIL Annual General Meeting 2019 8 MAY Quarterly statement as at 31 March 2019 7 AUGUST Half-year fina
Slide 44: For information, please contact
Backup: Shareholder information For information, please contact Investor Relations Team Christian Becker-Hussong Thorsten Dzuba Christine Franziszi Head of Investor & Rating Agency Relations Tel.: +49 (89) 3891-8030 Tel.: +49 (89) 3891-3875 Tel.: +49 (89) 3891-3910 E-mail: tdzuba@munichre.com E-mail
Slide 45: Disclaimer
Disclaimer This presentation contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the a