Munchener Ruckversicherungs-Gesellschaft AG · XETR:MUV2
Munchener Ruckversicherungs-Gesellschaft — Munich Re — Goldman Sachs Financial Services Conference 2010
22 slides from Munchener Ruckversicherungs-Gesellschaft's conference presentation, Jun 10, 2010
Slide 1: Opportunities and Challenges on the Road to Recovery
OPPORTUNITIES AND CHALLENGES ON THE ROAD TO RECOVERY Goldman Sachs Financial Services Conference Madrid, 10 June 2010 Jörg Schneider Goldman Sachs Financial Services Conference 1
Slide 2: A leading global (re)insurer
Munich Re (Group) – Integrated business model A leading global (re)insurer Munich Re – Premium breakdown byy segment g ((consolidated)) €bn Reinsurance Primary insurance Property-casualty Property-casualty 3,949 (34%) 1,718 (15%) ((▲ 0.6%)) ((▲ 6.2%)) Totall T Reinsurance Q1 2010 Primary insurance L
Slide 3: Good Q1 result despite overall challenging start into 2010
Munich Re (Group) – Q1 result Good Q1 result despite overall challenging start into 2010 Munich Re ((Group) p) Pleasing Q1 result – Shareholders' equity Strong investment result Net income increased further strengthened to Annualised RoI of 5.2% to €485m €23.2bn High disposal gains not Investment re
Slide 4: Munich Re generates solid returns for its shareholders
Munich Re (Group) – Highlights Munich Re generates solid returns for its shareholders Investment profile Total shareholder return vs. risk2 High dividend yields and share buy-backs – Total shareholder return cash yield of around 10%1 10% Peer 2 Peer 3 Strictly value-based, risk-adjusted 5% managemen
Slide 5: Liability-driven integrated business model facilitating diversification and predictable results
Munich Re (Group) – Highlights Liability-driven integrated business model facilitating diversification and predictable results Disciplined financial management g as a strong g basis … RISK MANAGEMENT ASSET MANAGEMENT CAPITAL MANAGEMENT 1 Proven integrated risk 2 Well-diversified investment 3 Sound c
Slide 6: Solvency II – Regulatory response to the financial crisis
1 Risk management Solvency II – Regulatory response to the financial crisis promotes professional and holistic corporate management Experience from the crisis Long-term g opportunities Accumulation Asset liability of wealth management Funding FINANCIAL Debt financed Product/under- SOLVENCY Investmen
Slide 7: Solvency II – Latest developments are going in the right direction
1 Risk management Solvency II – Latest developments are going in the right direction but further corrections seem necessary Developments p Overall changes g Diversification Increased allowance for diversification Correlation Reduced correlation between risk modules Calibration Reduced risk factors I
Slide 8: Solvency II provides business potential crystallising the value of the reinsurance business model
1 Risk management Solvency II provides business potential fully crystallising the value of the reinsurance business model Risk transfer – Illustrative Deduction on capital p relief for the Primary insurer's Reinsurer's counterparty default risk1 portfolio portfolio 60% 1 reinsurer 2 reinsurers 55% R
Slide 9: Fixed-income portfolio focused on highly rated credit risk
2 Asset management Fixed-income portfolio focused on highly rated credit risk – Weaker sovereigns remain a challenge but with limited impact Fixed-income p portfolio1 Governments p per country y2 Loans to policyholders/Mortgage loans Government/Semi- In % of total government exposure 3% (31.12.09: 4
Slide 10: Investment strategy for 2010
2 Asset management Investment strategy for 2010 – Well-prepared for different economic and capital market scenarios Fixed-income portfolio positioned with an … complemented byy careful re-risking g in eye on potential market disruptions … diversified asset classes Sovereign debt Equities Maintain
Slide 11: Diversified business model generates returns well above cost of capital
3 Capital management Diversified business model generates returns well above (low) cost of capital Return on equityy vs. cost of capital1 Return on equity q y and volatility y2 % Return on equity % Cost of capital Return on equity Average 18 15.3 14.1 Peer 1 RoE R E 12.5 11.8 12.1% 15 9.8 Peer 2 9.3
Slide 12: Strong book value growth based on shareholder-friendly capital repatriation
3 Capital management Strong book value growth based on shareholder- friendly capital repatriation Book value per share1 Sound capital p base2 Book value per share (plus dividend and share buy-back) € Book value per share Regulatory solvency capital ratio of 260% 140.3 140 CAGR: 9.3% 9 3% 134.5 129.1
Slide 13: Non-Life business development demonstrates strict portfolio management
4 Reinsurance Non-Life business development demonstrates strict portfolio management Demand patterns of major j client segments g Combined ratio and volatilityy (2005–2009) ( )1 Level of sophistication Average combined ratio 2005–2009 110 High Value optimisation and complex risks-driven segment Gl
Slide 14: Life reinsurance – Consistently profitable and less volatile core segment
4 Reinsurance Life reinsurance – Consistently profitable and less volatile core segment with leading market position % Life reinsurance – Global market share1 Life reinsurance – Strategic g p positioning g % Need for support Importance of Munich Re 27 in underwriting asset-liability Demand for uranc
Slide 15: ERGO well positioned throughout all segments
4 Primary Insurance ERGO well positioned throughout all segments – Fostering growth through new brand strategy Well-balanced business mix Solid performance in comparison to peers1 Premium Break- 16.3 down by Property- Life % segment casualty 1,569 (33%) 13.0 13.4 in €m 1 731 (37%) 1,731 (▲ 4.0 4 0 %
Slide 16: Managing life business – Stringent ALM of the back-book
4 Primary Insurance Managing life business – Stringent ALM of the back- book focus on increasing profitability for new business book, Economic business steering g Improve p market p position Effectively managing the back-book Sound financial stability1 Duration Valuation Net investment Solvability4
Slide 17: International health markets will continue to grow above GDP
4 Munich Health International health markets will continue to grow above GDP and shift to private sector Total health expenditure p 1 ((THE)) g grows Increase in total health expenditure p mainly y above GDP – PHE grows even stronger driven by four significant growth drivers €bn Public health expend
Slide 18: Business model flexibility across the health risk value chain
4 Munich Health Business model flexibility across the health risk value chain Munich Health Example p Risk taking Risk-taking Risk management business Financial Admini- Medical Network Health models protection Service Sales stration mgmt mgmt supply Reinsurance R i – Proportional P ti l Traditiona
Slide 19: Well balanced portfolio allows Munich Re to seize opportunities
Munich Re (Group) – Outlook Well balanced portfolio allows Munich Re to seize opportunities ‘on on the road to recovery’ recovery Munich Re ((Group) p) RORAC CAPITAL REPATRIATION Target of achieving 15% after tax Continuation of share buy-back programme over-the-cycle over the cycle to stand of up t
Slide 20: Financial calendar
Backup: Shareholder information Financial calendar FINANCIAL CALENDAR 4 August 2010 Interim report as at 30 June 2010; half-year press conference 29 September 2010 Bank of America Merrill Lynch "Banking & Insurance CEO Conference", London 9 November 2010 Interim report as at 30 September 2010 10 Mar
Slide 21: 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 22: Disclaimer
Backup: Shareholder information 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
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