Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2
Munchener Ruckversicherungs-gesellschaft — Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München — Q4 2022 Earnings Presentation
33 slides from Munchener Ruckversicherungs-gesellschaft's earnings presentation, Feb 24, 2023
Slide 1: Balance sheet media conference for 2022 financial statements
Munich Re Group Balance sheet media conference for 2022 financial statements 23 February 2023 Please note: Presentation based on 2022 preliminary figures
Slide 2: Agenda
Balance sheet media conference Agenda 01 02 Munich Re Group finance and risk Balance sheet media conference 23 February 2023 2
Slide 3: Munich Re
01 Munich Re Source: Munich Re
Slide 4: Munich Re delivers in 2022
Munich Re delivers in 2022 Strong performance despite macroeconomic turbulences and high major industry losses Munich Re’s strong credentials … … built the basis for delivering in 2022 Superior underwriting Risk selection safeguards Financial performance Capital repatriation high portfolio quality G
Slide 5: Diversification of business and earnings drivers pays off
Diversification of business and earnings drivers pays off Consolidated result 2022 Pleasing technical profitability offsetting lower €bn investment result 3.3 3.4 ▪ Strong underlying performance and benefit from higher interest rates … 0.6 0.8 ERGO ▪ … compensating for slightly lower result in reins
Slide 6: Shareholders participate in strong 2022 results, underlining trajectory to deliver on Ambition 2025 targets
Shareholders participate in strong 2022 results, underlining trajectory to deliver on Ambition 2025 targets AMBITION 2025 (IFRS 4) RoE Achievements in 2022 Profitability well above cost of capital – 12–14% 13.5% both in reinsurance and at ERGO EPS growth1 Ongoing profitable business expansion – ≥5%
Slide 7: Insurance industry facing high inflation and nat cat losses in 2022
Insurance industry facing high level of inflation and nat cat losses in 2022 – Munich Re managing volatility to deliver Consumer price inflation % Inflation 12 Germany USA 1.1 Prudently reflecting impact on persisted at 9 underwriting and reserving1 – 6 prolongs hardening market multi-decade 3 1.2 H
Slide 8: January renewals – Growing into a hardening P-C reinsurance market
January renewals – Growing into a hardening 1.1 P-C reinsurance market Renewals 2019–2022 January Higher risk-adjusted pricing % renewals 20231 ▪ Individual price changes by line of business at a stable 2.3 portfolio composition amount to 1.3% – additional price 1.8 increase of almost 1% due to chan
Slide 9: Strong capacity supports risk-return optimisation
Strong capacity supports 1.1 risk-return optimisation Volume change Property XL – Nat cat provides highly attractive margins % Property XL ▪ Munich Re continues to have capacity within its overall risk 40 appetite for cat business in a healthy pricing environment … ▪ Strong growth with a material pr
Slide 10: Higher interest rates improving quality of investment result
Higher interest rates improving quality of investment 1.2 result with higher contribution of sustainable income Fixed-income portfolio Impact of rising interest rates Reinvestment yield exceeds running yield 4% Induce manageable short-term headwind for the investment return 3% Munich Re’s investment
Slide 11: Nat cat one of the most profitable lines of business
Nat cat one of the most profitable lines of business 2.1 despite high industry losses in recent years Munich Re nat cat ratio vs. budget1 State-of-the art risk models 5% ▪ Nat cat risks well captured in risk models – 5-year loss average meets expectations 2021 ▪ Increasing industry loss trend manage
Slide 12: Promising earnings trend beyond core P-C RI facilitates diversification
Promising earnings trend beyond core P-C RI 2.2 facilitates increasing diversification of earnings profile Relative earnings contribution over Core P-C RI Risk Solutions L&H RI ERGO the cycle Development of earnings contribution relative to Munich Re’s Group result. High relative earnings contributi
Slide 13: Risk Solutions strengthened by bundling under Global Specialty Insurance (GSI)
Risk Solutions will be further strengthened by bundling 2.2 responsibility under Global Specialty Insurance (GSI) AMBITION 2025 GSI to become a powerful player in Optimally positioned STRINGENCY specialty insurance to deliver on Ambition worldwide Comprehensive 2025 targets product, market and broke
Slide 14: ERGO delivered in 2022 – contributing to earnings diversification
ERGO delivered in 2022 – sustainably contributing to 2.2 Munich Re’s earnings diversification Achievements in 2022 Ambition 2025 ▪ Above-market growth in all major markets Strong ▪ Strong premium growth across all segments and regions ▪ Leading digitalisation technologies to foundation enhance custo
Slide 15: Munich Re Group approach to decarbonisation
Munich Re Group approach to decarbonisation Lead by climate action – leveraging role as investor, underwriter and audible public voice Ambition 2025 defines a clear Net-zero target Net-zero target for set of targets and roadmap to for own operations insurance and assets reduce GHG emissions 2020 202
Slide 16: Delivery on climate ambition through emission reductions
Delivery on climate ambition through emission reductions Achievements in 2022 GHG emissions1 Total –46% ▪ Green bond investments: €2.3bn ▪ Forestry investments4: €1.5bn Assets2 Thermal coal –48% ▪ Certified real estate: €2.6bn Oil and gas –29% ▪ Renewable energies: €2.4bn ▪ Reduction achieved by act
Slide 17: Gender ambition 2025
Gender ambition 2025 Approaching the targeted 40% women in leadership roles Share of women at management level Achievements in 2022 Growth 37.8 38.5 40% Munich Re Group increased representation from 37.8% in 2021 to 38.5% in 2022 35.1 Talent Representation of women in talent programmes has increased
Slide 18: Ambition 2025 – Well on track to achieve targets
Ambition 2025 – Well on track to achieve targets Seizing growth options with a strong balance sheet AMBITION 2025 (IFRS 9/17) Higher interest rates RoE Economically positive, increasing 14–16% sustainable results EPS growth1 Capital repatriation Strong earnings and ≥5% capitalisation fund dividend g
Slide 19: Our commitment to success
Our commitment to success Leading total shareholder return (TSR) TSR 1.1.2019 – 31.12.20221 1.1.2019 – 31.12.2022 % 90.5 88.2 Profitability 10.8% 82.9 Average RoE 72.6 44.0 40.2 26.1 Growth 36.8% Premium increase Capital €7.5bn –34.5 repatriation Total payout Munich Re Peer Peer Peer Peer Peer Peer
Slide 20: Outlook 2023 confirmed
Outlook 2023 confirmed1 Group Insurance revenue (gross) Net result Return on investment ~ €58bn ~ €4.0bn > 2.2% Combined ratio ERGO Insurance revenue (gross) Net result P-C Germany International ~ €19bn ~ €0.7bn ~ 89% ~ 90% Combined ratio Total technical result Reinsurance Insurance revenue (gross)
Slide 21: Group finance and risk
02 Group finance and risk Source: Munich Re
Slide 22: Financial results 2022
Group finance and risk Financial results 2022 Strong earnings and capitalisation, net income above guidance ▪ Substantial business growth and pleasing underlying profitability more than IFRS net income compensate for lower investment result (RoI: 2.1%) ▪ Reinsurance: strong technical performance in
Slide 23: Financial results Q4 2022
Group finance and risk Financial results Q4 2022 High net income exceeding ambitious guidance IFRS Net income Technical result Investment result €1,516m (€871m) €1,409m (€848m) €2,041m (€1,425m) Reinsurance €1,393m Return on investment 3.6% P-C reinsurance P-C reinsurance Strong underlying performan
Slide 24: Investment result
Group finance and risk Investment result Resilient performance given volatile capital markets IFRS 2022 1.7 –0.7 % 2.8 –1.3 ▪ Regular income –0.4 0.3 2.4 2.1 Increase mainly driven by higher interest rates ▪ Write-downs Challenging capital market environment ▪ Disposal gains/losses 2021 1.3 –0.3 Gai
Slide 25: ERGO – IFRS key financials 2022
Group finance and risk ERGO – IFRS key financials 2022 Significantly higher result and strong premium growth across all segments IFRS ERGO L&H Germany P-C Germany International GWP €19.1bn €9.7bn (€9.2bn) €4.2bn (€3.9bn) €5.2bn (€5.1bn) (€18.2bn) Significant growth driven by travel and Life New Book
Slide 26: Reinsurance – IFRS key financials 2022
Group finance and risk Reinsurance – IFRS key financials 2022 Strong profitable growth in P-C, exceptionally good result in L&H IFRS Reinsurance P-C reinsurance L&H reinsurance GWP €48.1bn €34.4bn (€28.8bn) €13.7bn (€12.6bn) (€41.4bn) Strong organic growth in almost all lines of business, Growth mai
Slide 27: Risk Solutions – ongoing strong organic growth
Group finance and risk Risk Solutions – ongoing strong organic growth Combined ratio impacted by large losses and inflation, good underlying performance IFRS Gross premiums written €bn ▪ Strong organic growth across all units, taking advantage of profitable business opportunities +35% in a hardening
Slide 28: Prudent reserving protects balance sheet against unexpected developments
Group finance and risk Prudent reserving protects balance sheet against unexpected developments IFRS Managing industry hot spots Munich Re measures Ongoing reserve releases1 Economic inflation Thorough assessment of inflation impact and reallocation of reserves, maintaining 5.6 Significant increase
Slide 29: Inflation surge well manageable, largely unchanged prudency
Group finance and risk Inflation surge well manageable, largely unchanged prudency Inflation fully and consistently reflected in underwriting and reserving approach IFRS New business in 2022 New business Conservatively assessed based on Cautious loss picks in 2022 most recent inflation assumptions i
Slide 30: Reconciliation combined ratio 2023 from IFRS 4 to IFRS 17
Group finance and risk Reconciliation combined ratio 2023 from IFRS 4 to IFRS 17 IFRS ~ 95% Indicative ~ 86% ~ –2% ~ –1% to –2% –1% to –2% –5% to –9% ◼ Expenses 14–15% ◼ Major losses ~ 14% Major loss ◼ Basic losses 57–58% expectation increases from ~ 13% to ~ 14%3 due to growth in property XL Underl
Slide 31: Solvency II ratio
Group finance and risk Solvency II ratio Strong capitalisation supports growth and attractive capital repatriation Economic Development of the Solvency II ratio1 SII sensitivities % % 271 260 263 245 237 227 257 256 257 208 248 220 Optimal range 222 175 Interest rates Equity markets Spread Spread CO
Slide 32: Continuously increasing share of insurance risks
Group finance and risk Continuously increasing share of insurance risks while keeping overall well-balanced risk profile Economic SCR composition of investment and insurance risks % 38 Investment risks 49 48 49 46 Significant decrease due to higher interest-rate levels Stable diversification benefit
Slide 33: 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