Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2
Munchener Ruckversicherungs-gesellschaft — Munich Re — Investor Day (December 2022)
14 slides from Munchener Ruckversicherungs-gesellschaft's investor day presentation, Dec 15, 2022
Slide 1: Excerpt Investor Day (IFRS 17)
Munich Re Group Excerpt Investor Day (IFRS 17) 15 December 2022 Christoph Jurecka Investor Day 2022 15 December 2022 1
Slide 2: Roadmap IFRS 9/17
Introduction Roadmap IFRS 9/17 Munich Re prepared for transition to new accounting regime Investor Day – IFRS 17 Publication of Publication date Publication of Publication of key figures annual report 2022 H1 2023 annual report 2023 and outlook 2023 Detailed opening H1 figures and 2023 result and ac
Slide 3: IFRS 9/17 is a landmark change
Introduction IFRS 9/17 is a landmark change Addressing shortcomings of the former accounting regime NO IMPACT ON CONSISTENCY Market-consistent valuation to solve systematic IAS 39/IFRS 4 Business strategy accounting mismatches Dividend and share IFRS 9/17 better buy-back policy CLARITY Insurance bus
Slide 4: Higher share of P&L-sensitive investments
Introduction Preliminary/unaudited Higher share of P&L-sensitive investments Increase in total investments due to stronger reflection of fair values IAS 39 IFRS 9 Total investments Deposits retained Amortised costs Participations Participations Real estate 31% 4% Real estate (non-VFA) ~€230bn ~€240b
Slide 5: Insurance liabilities under IFRS
Introduction Insurance liabilities under IFRS 17 Generally following a building-block approach (General Measurement Model) Future cash 1 1 in-/outflows Estimation of all future cash flows within the boundary of each contract Outflows 2 2 Discounting Discount rates adjust cash flows for the time valu
Slide 6: Equity at transition
Balance sheet Preliminary/unaudited Equity at transition Shift of unrealised gains from equity to CSM €bn Change in valuation base Equity IFRS 4 31.12.2021 30.9 ▪ Change from IFRS 4 to IFRS 17 best-estimate cash flows ▪ Discounting of insurance cash flows Change in ▪ Current off-balance-sheet reserv
Slide 7: New P&L structure according to IFRS 9/17
P&L New P&L structure according to IFRS 9/17 Providing more transparency on Munich Re’s sources of earnings 1 Gross premiums written (Non GAAP) 1 Gross premiums written (GWP) Insurance revenue Use as non-GAAP measure to indicate sales performance 2 Insurance service expenses 2 Revenues and expenses
Slide 8: Insurance revenue lower than GWP
P&L Preliminary/unaudited Insurance revenue lower than GWP Sales performance is unaffected Reinsurance €bn 50 –11 39 Munich Re Group €bn Main drivers of delta between 70 –12 insurance revenue and GWP GWP Delta Insurance 58 revenue ▪ Exclusion of fixed commissions ▪ Exclusion of non-distinct investme
Slide 9: P-C reinsurance: Reconciliation of combined ratio
Reinsurance – Property-casualty reinsurance P-C reinsurance: Reconciliation of combined ratio Declining noticeably under IFRS 17 ILLUSTRATIVE Major drivers ▪ Deduction of commissions from numerator and denominator leads Expense ratio to overall decrease of C/R1 ▪ Discounting of claims ▪ Changes in l
Slide 10: P&L better reflects economic value creation
P&L P&L better reflects economic value creation Increase of overall earnings level due to transition to IFRS 9/17 Life and health Property-casualty reinsurance reinsurance ERGO ▪ Continued CSM release ensures ▪ Some earnings volatility from ▪ L&H: CSM as buffer under VFA higher earnings stability in
Slide 11: Outlook 2023
Outlook Outlook 2023 KPIs adjusted to IFRS 9/17 Group Insurance revenue Net result Return on investment ~ €58bn ~ €4.0bn > 2.2% Combined ratio ERGO Insurance revenue Net result P-C Germany International ~ €19bn ~ €0.7bn ~ 89% ~ 90% Combined ratio Total technical result Reinsurance Insurance revenue
Slide 12: Ambition 2025
Outlook Ambition 2025 Calculation of RoE and EPS adjusted to IFRS 9/17 Old Group targets 2025 NEW Group targets 2025 Improved RoE, 2025 12–14% 14–16% ▪ No update to operational Ambition EPS growth1 2025 targets – only “mechanical” ≥5% ≥5% translation to IFRS 9/17 ▪ Increased Group RoE DPS growth2 ow
Slide 13: Outlook 2022
Outlook 2022 On the way to achieving our Group Ambition 2025 Group Gross premiums written Net result Return on investment ~ €61bn ~ €3.3bn >2.5% Combined ratio ERGO Gross premiums written Net result P-C Germany International ~ €18.5bn ~ €0.6bn1 ~ 91% ~ 92% Combined ratio Technical result, incl. fee
Slide 14: 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